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MTN announced proposed BBBEE dealBy Hanleigh Daniels 19 July 2010 | Categories: news
MTN has announced a proposed Broad-Based Black Economic Empowerment (BBBEE) deal that will result in a 4% stake in the company, which is worth about R8.1 billion, being sold to black investors.
“BEE is integral to the ethos of MTN, and MTN believes that broad-based BEE participation is important to its future success as a Group,” said Phuthuma Nhleko, MTN president and CEO.
The new transaction called MTN Zakhele is, according to the company, the largest empowerment deal in South Africa’s telecommunications sector to date as it will give MTN South Africa an additional effective black ownership of up to 29.1%.
“Since its incorporation in South Africa in 1994, MTN has been at the forefront of BEE in South Africa and remains fully committed to the principles of BBBEE to provide long-term and sustainable benefits to its participants. It is for this reason that we have structured the new MTN BEE Transaction through an offer to the Black public, acting as far as possible within the letter and the spirit of the BBBEE codes and empowerment requirements for South African businesses,” stated Nhleko.
MTN Zakhele will be executed via MTN’s South African listing and is expected to open to the public on 30 August with a prospectus containing details of the offer available from this date at MTN retail stores as well as Post Office outlets throughout the country.
The transaction will run for a period of six years and for the first three years investors will be lock-in, but after those three years participants will be free to trade with other BEE investors.
Investors will be able to subscribe for ordinary shares at a price of R20 per share, with the minimum subscription required for participation being R2 000 (or 100 ordinary shares) and there will be no cap per individual investing.
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