MTN to increase black ownership to 30%
$729m share sale will increase black share ownership to level that allows MTN to bid in South African share auction
MTN is to sell shares worth $729 million to black investors in order to qualify it for South Africa’s next spectrum auction.
The shares, representing 4% of the company, will take indirect black ownership of the group to around 30%, reaching the limit set by the regulator, the Independent Communications Authority of South Africa (Icasa).
The transaction will be carried out through a new special purpose operation, called MTN Zakhele Futhi, which will add to an existing special purpose empowerment vehicle, MTN Zakhele.
Phuthuma Nhleko, MTN’s group executive chairman, said: “This new transaction, together with the continuing contribution of the MTN Zakhele transaction, will translate to an effective indirect ‘see-through’ black ownership in excess of 30% of MTN’s South African operations.”
Icasa has said that all applicants in the spectrum licence auction should have a minimum of 30% black equity.
The MTN Zakhele Futhi offer is expected to be launched on 12 September, said the group.
MTN said it will sell the shares at 102.80 rand ($7.59), a discount of around 20% on the price before MTN’s announcement.