OWN CORRESPONDENT, Johannesburg | Tuesday 01.00pm.
IN the biggest state restructuring deal under President Mbeki’s auspices, Transnet has reached an agreement with Johnnic Holdings Limited and Johnnic Communications Limited to convert its 23% stake in MTN into shares in its holding company M-Cell Limited, listed on the Johannesburg Stock Exchange.
Transnet will also sell 75 million shares to Johnnic for R2.5 billion which establishes Johnnic as the majority owner of M-Cell.
Following the conversion of Transnet’s MTN stake into M-Cell shares and the sale of the 75 million shares, Transnet will own 24% of M-Cell and Johnnic will control just over 50%.
Transnet managing director, Saki Macozoma, said taking the MTN stake into M-Cell will consolidate the group’s structure and should enhance M-Cell’s share price.
“The sale of less than one fifth of our total stake to Johnnic has enabled us to recoup nearly twice our entire initial investment cost, whilst retaining a 24% stake in M-Cell,” said
Macozoma.
The proceeds from the transaction will be used for the continuing restructuring programme of Transnet which includes the reduction of its debt and also recapitalisation.
The deal is felt by some analysts to reinforces Johnnic as one of the country’s leading black owned firms.