MTN reveals R8.1bn BEE deal

Johannesburg - Telecommunications firm MTN Group [JSE:MTN] proposed an R8.1bn black empowerment deal to sell up to 4% of the company's shares on Thursday.

MTN, Africa's biggest mobile operator by subscribers, said the deal would translate into black ownership of up to 29% of South African operations.

MTN intends to implement the transaction by means of a public offering where black people will be invited to subscribe for shares in Black Investment Company (BIC) - MTN's special purpose vehicle created to effect the deal.

BIC will use the funds raised, as well as a possible cash donation of up to R1.2bn from MTN, to acquire 35.1 million shares in MTN.

The MTN BEE Transaction size is anticipated to be 4% of MTN's issued ordinary share capital on a fully diluted basis, but may be scaled down should public subscriptions under the BIC public offer not be sufficient to allow for this.

The share price at which the transaction will be implemented is R107.46 - equal to the 20-trading day volume weighted average price of an MTN share.

"BEE is integral to the ethos of MTN and MTN believes that broad-based BEE participation is important to its future success as a group," MTN said.

The firm added that the economic cost of implementing the transaction iis estimated to be about R2.2bn. This represents about 1.1% of the group's market capitalisation.

It is anticipated that the BIC public offer will be launched on or about August 30 2010.
    
Participants may subscribe for BIC shares at 2 000c each. The minimum subscription required is for 100 BIC shares, with no maximum limit.

MTN said it would also issue abouty 0.1% of its issued ordinary share capital to an employee share ownership plan, for the benefit of eligible MTN employees.

 - Reuters & I-Net Bridge