JOHANNESBURG - Multinational mobile operator MTN yesterday announced the third delay in the completion of a transaction that will see its non-executive chairperson Phuthuma Nhleko acquire 14million shares in the company.
The group told the market it would now finalise the offloading of its Zakhele Futhi shares to Nhleko’s wholly owned Main Street 1561 at the end of June.
“Shareholders are informed that, following satisfaction of the conditions precedent to the transaction, MTN and Main Street 1561 have agreed to extend the completion date to June 30,” the company said.
Initially the completion was scheduled for February 15, but the deadline was later pushed back to March 30.
The deal was subject to certain administrative and procedural conditions precedent being fulfilled or waived, including the requisite Fica and BEE verification being completed on Main Street 1561. The conditions have now been met.
MTN was not immediately available for comment.
Peter Takaendesa, a portfolio manager at Cape Town-based Mergence Investment Managers, said: “The announcement indicates that all conditions have been met, so I think only the funding for Main Street 1561 is outstanding.” Key to note is that MTN is selling these shares to Main Street 1561 at its cost of R20 per Zakhele Futhi share.
Zakhele Futhi, the group’s second BEE empowerment, was implemented in November 2016. The scheme was expected to subscribe for up to 76million MTN shares, representing about 4percent of MTN’s issued share capital.
The shares were under-subscribed. To make up for the shortfall, MTN subscribed for 27848672 MTN Zakhele Futhi shares.
In December 2017 MTN entered into an agreement to sell 14750000 shares to Main Street 1561 for R295million or R20 a share, pending the conditions.
Zakhele Futhi failed to follow on its predecessor Zakhele, which gave black investors a 20percent return on investment. Zakhele lapsed last November.
Zakhele Futhi only managed to muster support from 81000 new investors to raise R1.094bn and R817m from Zakhele shareholders who decided to re-invest.
This meant that MTN raised a total of R1.91bn from the public offer - significantly short of the near R2.5bn it had set out to raise.
MTN shares declined 2.76percent on the JSE to close at R115.74.