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MTN Zakhele share trades from November

30 Jul 2013

MTN's share price has appreciated 64% since the black public were invited to subscribe for MTN Zakhele shares at R20 each in November 2010‚ chairman Thulani Gcabashe said at MTN Zakhele's annual general meeting in Sandton on Monday (29 July).

MTN Zakhele investors can start trading their shares from its third anniversary‚ in November.

Gcabashe said the finalisation of the trading platform and governing rules was progressing well. "We are undertaking a number of initiatives to facilitate a smooth and understandable trading environment in which all holders of MTN Zakhele ordinary shares may participate."

At R8.2bn‚ MTN Zakhele is‚ to date‚ the largest empowerment scheme in SA's telecommunications industry. Shareholders initially contributed about 20% of the total funding needed for the empowerment transaction‚ with MTN lending the balance.

MTN Zakhele started partially settling its debt last September with residual cash from dividends received on the underlying MTN shares. MTN Zakhele used that cash to acquire shares in the open market and deliver them back to MTN.

Gcabashe said dividends received from MTN had increased over the years because of stronger earnings and a steady increase in its payout ratio: 40% in September 2010‚ 55% in April 2011‚ 65% in September 2011‚ 70% in April 2012 and 72% in September 2012.

"The MTN dividends received during April and September 2012 exceeded the obligations under the preference share funding arrangements. This enabled the company to fully settle the class B preference share balance in April 2012‚" Gcabashe said.

"The meaningful increase in dividends received from MTN has allowed the scheme to settle its debt obligations sooner than anticipated. This‚ together with the strong performance of MTN's share price since the establishment of MTN Zakhele‚ will greatly benefit shareholders," he added.

Source: I-Net Bridge

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