MTN said on Friday a due diligence investigation had been finalised on its plan to sell 5% to 6% of its shares to black investors.
The company said in February that the black economic empowerment (BEE) deal will be delayed because of severe constraints in the current financial markets.
”The board believes that it remains in the best interests of MTN to implement the Newshelf acquisition at the present time,” the company said on Friday in a statement.
It added that all agreements necessary to implement the proposed Newshelf acquisition were entered into on March 26.
MTN said in December last year it planned to do a new BEE deal in the first half of 2009 to replace an existing agreement with black staff which was due to unwind.
Black shareholders, including top MTN managers, own 13% of MTN through a company called Newshelf 664 — a stake the company values at R24,4-billion. That deal was due to unwind on December 22.
To facilitate the deal, MTN would acquire Newshelf at a discount of about 8% to the market value of Newshelf’s MTN shares.
The company said the acquisition of Newshelf would result in an immediate reduction of about 1,6% in the total number of its shares in issue.
MTN has signed a memorandum of understanding (MoU) under which government-owned fund manager PIC would help facilitate the deal.
MTN will pay PIC R400-million in cash and issue 213,9-million shares, or about 11,5% of its capital, to settle any outstanding Newshelf debts. In exchange it will receive the 13% Newshelf stake, which it would cancel.
MTN will later offer shares, including some of those held by PIC, to black members of the public, staff and previous Newshelf investors. – Reuters