MTN launching investment programme to encourage black ownership

MTN will funnel ZAR9.9 billion ($730 million) into a black empowerment investment scheme in preparation for next year’s spectrum auctions, which require bidders to have a minimum black shareholding of 30%.

MTN’s new Zakhele Futhi initiative will replace its current MTN Zakhele, which is scheduled to be dissolved on 24th November. Eligible black participants will be able to acquire shares in MTN Zakhele Futhi via a public offering, with a minimum investment of ZAR2,000.

Current shareholders in MTN Zakhele will be able to reinvest some of their holding into MTN Zakhele Futhi, which will hold roughly 4% of MTN Group’s equity. MTN has stated that its new initiative, along with the ongoing investment of MTN Zakhele, constitutes an “effective indirect, ‘see-though’ black ownership in excess of 30% of MTN’s South African operations”.

The new investment scheme will be accompanied by a new share ownership scheme for employees, with MTN announcing that it would place around 0.1% of its issued share capital into a trust for its workers, although it will not be available to those currently in director or management-level positions.

MTN Zakhele Futhi is currently scheduled to run between 12th September and 21st October, with the prospectus available from MTN stores across the country as well as branches of Nedbank.

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