MTN Zakhele Futhi (MTNZF), the telecom giant’s empowerment scheme, has successfully raised R3 billion through a strategic share placement that’s reshaping black economic participation in SA’s corporate sector. The special-purpose vehicle sold 23.77 million MTN shares – representing 1.26% of total shares – at R128 each through an accelerated bookbuild managed by Rand Merchant Bank and Morgan Stanley. This pricing represented a careful balance: a 2.8% discount to that day’s closing price but a 2.8% premium to the 30-day average, ensuring fair value for both sellers and institutional buyers.
The transaction’s proceeds will first settle MTNZF’s outstanding preference share debt before distributing remaining funds to ordinary shareholders. Notably, MTN itself stands to receive a portion as a 14.8% stakeholder in the empowerment vehicle. This financial manoeuvre coincides with MTNZF’s early settlement offer for its notional vendor funding arrangement, triggering MTN’s call option exercise on June 23 with settlement expected four days later. The deal demonstrates how carefully structured BEE schemes can create liquidity events while maintaining long-term empowerment objectives.
Currently holding about 4% of MTN’s shares, MTNZF remains a cornerstone of the telecom’s transformation strategy following its 2016 establishment. The vehicle’s unique structure has enabled thousands of black investors to participate in MTN’s growth story, even as the company proposed extending the scheme’s lifespan to 2027 last August. This placement provides partial monetisation while preserving the scheme’s broader economic participation goals.
The transaction occurs against MTN’s robust operational backdrop, with group service revenue growing 3.1% to R43.1 billion recently. Strong performances in postpaid, enterprise, and fintech segments continue driving value – making MTNZF’s stake particularly attractive to investors. The deal’s structure ensures MTN maintains its BEE credentials while allowing participants to realise partial value from their investments, showcasing a mature approach to empowerment financing in South Africa’s evolving equity markets.