Telecommunications group MTN started a R9,9bn empowerment plan that will boost black ownership of its South African unit to more than 30% and allow Africa’s biggest mobile operator to bid for high-speed Internet spectrum.
Stock will be issued through empowerment vehicle MTN Zakhele Futhi to qualifying black employees at R102,80 each, a 20% discount to the 10-day volume weighted average price, the Johannesburg-based company said in a statement on Monday.
The fund replaces MTN Zakhele, which will close on 24 November. Black economic empowerment programmes are set up to compensate those discriminated against during apartheid.
“This new transaction, together with the continuing contribution of the MTN Zakhele transaction, will translate to an effective indirect ‘see-through’ black ownership in excess of 30% of MTN’s South African operations,” chairman Phuthuma Nhleko said in the statement.
The transaction makes MTN the only South African company that’s qualified to bid for high-speed Internet spectrum in a proposed auction early next year.
Companies need 30% black ownership to make an offer, according to the rules published by the Independent Communications Authority of South Africa, the industry regulator.
The proposed auction of five blocks of spectrum is expected to raise more than R12bn and extend broadband access to rural parts of the country.
The proposed auction is being contested by telecommunications minister Siyabonga Cwele in court.
MTN shares fell by 0,2% to R125,15 as of 10.46am in Johannesburg, the sixth consecutive day of declines. The stock is down by 5,8% this year, valuing the company at R231bn. — (c) 2016 Bloomberg LP