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JSE debut for MTN BEE scheme Zakhele Futhi

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Shares of MTN’s special purpose empowerment vehicle MTN Zakhele Futhi (MTNZF) saw a strong debut on the Johannesburg Stock Exchange (JSE) today, after pricing its shares at R5.00 each, becoming a hit on the bourse’s empowerment segment.

MTNZF shares were up 14.58% in morning trade.

The JSE’s empowerment segment was established in 2015 for the listing of BEE securities and provides previously disadvantaged South African shareholders with a platform to trade their shares.

The segment has a market capitalisation of R2.7 billion.

MTNZF is the JSE’s fourth listing for 2019 after the listing of Prosus last month, as well as the MultiChoice Group and Tsogo Sun earlier in the year.

Valdene Reddy, acting director of capital markets at the JSE, says: “The listing of MTN Zakhele Futhi on our BEE segment represents significant progress in the transformation of our capital markets by providing growth, access and inclusivity to previously marginalised people in our country.”

MTNZF is a ring-fenced special purpose vehicle aimed at facilitating investment by previously disadvantaged South Africans in MTN Group. The entity holds close to 77 million shares in MTN, amounting to approximately 4% of MTN’s issued share capital.

This is the second time MTN is listing an empowerment scheme. The previous scheme, MTN Zakhele, was listed on the JSE in 2015 and delisted the following year as it was wound up.

The Pan-African carrier recently announced changes to the current scheme, Zakhele Futhi, after being criticised by the Broad-Based Black Economic Empowerment Commission.

In July, the commission found the scheme did not meet the requirements of the Empowerment Act and suggested several remedies, including the right for the scheme to appoint its own board.

Additionally, other remedies suggested included changes to the governing documents, such as the memorandum of incorporation and the relationship agreement concluded in respect of MTN Group and Zakhele Futhi to grant black shareholders effective rights, control, participation and economic benefits in respect of their stakes.

Now, MTN says the empowerment vehicle has approximately 89 000 shareholders holding 123.4 million Zakhele Futhi ordinary shares. The company adds the listing of MTNZF will facilitate and enable trading in the empowerment shares among qualifying black participants.

Sindisiwe Mabaso-Koyana, chairperson of MTNZF, says: “MTN Zakhele Futhi is pleased to be listing on the JSE, providing our shareholders with the ability to now trade their shares and realise the market value of their investment. We have provided our shareholders with a facilitated trading process, operated by Nedbank, to ensure our shareholders are able to trade their shares in the most cost-efficient manner.

“Shareholders are also able to use their own broker through an independent trading process. Shareholders are encouraged to make sound investment decisions when electing to sell, hold or buy more shares in order to maximise the true value of their shares.”

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