MTN has raised R1,1bn through the public offer for its new black economic empowerment scheme, Zakhele Futhi, well short of the target of R2,5bn, but sufficient to allow the transaction to proceed. The telecommunications group will underwrite the difference.

The new scheme, which is expected to close by Thursday, replaces MTN’s previous empowerment scheme, Zakhele, which is in the process of being unwound this month.

The public offer raised the R1,1bn from more than 81 000 black applicants.

In addition, applications were received from 11 203 qualifying Zakhele shareholders holding in aggregate 13,5m Zakhele shares to reinvest into Zakhele Futhi.

The cash raised by Zakhele Futhi under the public offer exceeded the minimum amount of cash required for transaction to proceed, namely R250m.

MTN will underwrite 27,8m Zakhlele Futhi shares worth R557m to make up for the equity shortfall, it said in a note to shareholders.

The group said it will warehouse these shares for a period of time and then on-sell them to “select qualifying parties”. It said it has already received expressions of interest in this regard.

Ordinary shares in Zakhele Futhi will be allotted and issued to successful applicants on Wednesday, 23 November.