Wind­fall for New­shelf own­ers

MTN staff re­ceive ben­e­fit of six years of risky in­vest­ment

Finweek English Edition - - Companies & Markets -

YEARS OF RISK-TAK­ING and toil have fi­nally paid off for ap­prox­i­mately 3 200 cur­rent and pre­vi­ous em­ploy­ees of cel­lu­lar op­er­a­tor MTN Group: they’ll soon re­ceive a wind­fall of around 34m shares from the com­pany. The shares are set to be dis­trib­uted to in­di­vid­ual ben­e­fi­cia­ries of spe­cial pur­pose ve­hi­cle New­shelf 664 (via the Alpine Trust), which has held them since 2002.

Vest­ing in Jan­uary 2009, the New­shelf 664 deal has to be one of a few black eco­nomic empowerment deals with a happy end­ing, par­tic­u­larly in the pre­vail­ing mar­ket cli­mate. It paid an av­er­age 1390c/share back in 2002, which has now trans­lated to around R100/ share. The Alpine Trust will de­liver al­most 8m shares to nine MTN ex­ec­u­tives, with CE Phuthuma Nh­leko be­ing the big­gest ben­e­fi­ciary af­ter tak­ing de­liv­ery of 2,7m shares cur­rently val­ued at R270m.

Nh­leko owned 8% of New­shelf 664, with col­leagues Rob Nis­bet and Si­fiso Dabengwa each hold­ing around 6%. That en­ti­tled them to 1,9m shares each in the dis­tri­bu­tion. “The par­tic­i­pa­tion ra­tios of the ap­prox­i­mately 3 200 ben­e­fi­cia­ries of the trust vest over a six-year pe­riod, tak­ing into ac­count the com­pleted num­ber of years of em­ploy­ment with MTN dur­ing that six-year pe­riod,” says MTN.

Alpine Trust chair­man Paul Jenk­ins says a to­tal of 34,389m shares were re­ceived and will be dis­trib­uted to ben­e­fi­cia­ries. That equates to 1,8% of MTN’s is­sued share cap­i­tal. The rest of the 243,5m MTN shares left in New­shelf 664 will be sold to the Pub­lic In­vest­ment Cor­po­ra­tion (PIC) as part of the orig­i­nal fund­ing mech­a­nism. It has in turn agreed to sell them back to MTN.

In what was for a long time SA’s largest empowerment deal, New­shelf 664 was formed by MTN staff in­de­pen­dently of the com­pany, with the pur­pose of buy­ing MTN shares worth R4,3bn from Transnet Freight Rail. The pub­lic cor­po­ra­tion was in the process of re­duc­ing its 23,7% stake in MTN and had been looking for a for­eign buyer when New­shelf 664 pounced. The com­pany raised debt from Transnet it­self and the PIC to pay for the shares.

Now that the struc­ture has come to an end Nh­leko and col­leagues are re­ceiv­ing the shares as a spe­cial div­i­dend from New­shelf

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