The new BEE scheme will replace the current MTN Zakhele scheme, which is due to expire in November. MTN Zakhele investors will be given three options: either reinvest their shares in Zakhele Futhi for eight years, cash in their Zakhele shares, or accept MTN Group shares.
According to MTN, the purpose of the transaction is to expand its South African BEE ownership through a public offer to black individuals and groups. Group executive chairman, Phuthuma Nhleko, commented that the empowerment deal “will translate to an effective indirect see-through black ownership in excess of 30% of MTN’s South African operations”.
MTN’s board has also proposed an employee share ownership plan where MTN will issue 0.1% of its issued share capital to staff. The shares will be held in a trust, and directors and management will be excluded from this benefit.