As JSE-listed MTN Group unwinds its six-year-old empowerment vehicle, MTN Zakhele, work is under way to establish a new R9.9-billion broad-based black economic-empowerment (BBBEE) transaction to fulfill core targets.

The new special purpose vehicle, MTN Zakhele Futhi, owning an equity ownership of about 4% in MTN, will be open to Zakhele shareholders to reinvest and offer opportunities for black individuals to subscribe through a public offering, with a minimum investment of R2 000.

Shares for the proposed eight-year scheme will be issued at R102.80 apiece, a 20% discount to the ten-day volume weighted average price per MTN share on August 17 of R128.50.

Initial shareholders will be locked in for three years, after which, trade among other members of the black public will be opened.

“The 2016 MTN BEE transaction, together with the continuing contribution of the Zakhele empowerment transaction, translates to an effective indirect black ownership in excess of 30% of MTN's South African operations,” said MTN Group executive chairperson Phuthuma Nhleko.

Zakhele Futhi will be opened on September 12 and close on October 21, while Zakhele will wind up on November 24.

Zakhele was established in 2010 as a six-year scheme, with shares offered at R20 apiece at inception and growing to R77 a share by last week.

“That equates to a total return of about 400% and a compounded annual growth of about 26%,” MTN pointed out.

Meanwhile, the company plans to introduce a new employee share ownership plan (Esop), wherein MTN will issue 0.1% of its current fully diluted issued ordinary share capital to be held in a trust for the benefit of eligible MTN employees, excluding management and directors.

“The purpose of the 2016 Esop is to attract, motivate, reward and retain persons who contribute to the performance of MTN Group on a basis which aligns their interests with those of the MTN shareholders,” explained Nhleko.

The Esop will be effective November 24.