MTN — Africa’s biggest mobile company by subscribers — said on Wednesday it will delay its plan to sell 5% to 6% of its shares to black investors to meet South Africa’s quotas on black ownership.
The company said the Black Economic Empowerment (BEE) deal will be delayed because of severe constraints in the current financial markets.
”The board of directors of MTN has determined that it is presently not in the best interests of the company, its shareholders and the BEE investors to implement the proposed BEE transaction during the first half of 2009 as originally planned,” the company said in a statement.
But the company added its board remained fully committed to implementing the BEE deal at the appropriate time.
MTN said in December last year it planned to do a new BEE deal in the first half of 2009 to replace an existing agreement with black staff which was due to unwind.
Black shareholders, including top MTN managers, own 13,1% of MTN through a company called Newshelf 664 — a stake the company values at R24,4-billion. That deal was due to unwind on December 22.
To replace that deal, MTN planned to buy the Newshelf shares for a nominal value and settle outstanding funding obligations, before offering shares to the black public and its own black staff.
MTN said on Wednesday the deal would continue subject to concluding relevant agreements, which are in the process of being finalised. – Reuters