MTN Zakhele has listed its ordinary shares as BEE Securities on the BEE Segment of the Johannesburg Stock Exchange (JSE).
MTN Zakhele Chairperson Sindi Mabaso-Koyana said, “We’re proud to have reached this point in our journey as MTN Zakhele becomes the first broad-based black economic empowerment scheme to list on the JSE’s BEE Segment, subsequent to the recent amendments made by the JSE. The listing will provide shareholders with regulatory certainty for trading their MTN Zakhele shares.”
The ordinary shares in MTN Zakhele are owned by approximately 102 000 Black investors. Over 14 million shares valued at more than R1,2 billion changed hands on the MTN Zakhele Over-The-Counter (OTC) trading platform between November 2013 and October 2015. The MTN Zakhele JSE listing comes after a change in the Financial Services Board (FSB) policy in relation to the regulation of all providers of over-the-counter (OTC) share trading platforms for facilitating trading in own shares.
The MTN Zakhele Over-The-Counter (OTC) trading platform closed on 16 October 2015 and the last traded price was R102.30, which meant that the market capitalisation at that date was R8.2 billion. A new transaction platform is now open for verifications and registration, an essential process for all who wish to trade, even those who were registered on the previous platform. Shareholders and potential investors who wish to buy or sell MTN Zakhele shares may do so using the new transaction platform, via a website or through the dedicated call centre at 083 123 6869, a toll free number for MTN subscribers. Investors will also be able to use their own service providers, for example their own stockbrokers, to trade their MTN Zakhele shares, provided they have been verified to trade the shares in this manner.
Mabaso-Koyana explained that the trading experience on the new transaction platform would remain very similar to what it has been in the past on the MTN Zakhele OTC platform. MTN Zakhele has identified service providers who will provide shareholders and new investors with trading, custody and settlement services on the new transaction platform. “We know that our shareholders are mainly individuals who trade in small volumes, so it was important to continue to facilitate access to trading in the JSE environment through familiar platforms –a Website and Call Centre. For existing individual shareholders whose details have not changed, verification and registration on the new transaction platform is simple, all you need is your identity number and your cellphone. All existing shareholders who are black groups must complete a verification form and submit supporting documentation.”
“When using the transaction platform to trade, shareholders can only sell shares which they already own, and investors can only buy shares if they have deposited sufficient cash to do so,” says Mabaso-Koyana. “If shareholders and investors choose to use this process, they do not need to appoint a stockbroker.”
Mabaso-Koyana says that MTN Zakhele has worked closely with the JSE to meet key milestones in order to facilitate a listing on the amended JSE BEE Segment. “The BEE vehicles require certainty about the black ownership of their shares so it has been necessary to modify listings requirements,” says Mabaso-Koyana. “Our shareholders are largely individuals who trade in small volumes, so it was important to continue to facilitate access to trading on the JSE through familiar platforms. Importantly, after the JSE listing, shareholders will continue to be able to submit buy and sell orders through the existing methods, being the Call Centre and the Website.”
JSE director of capital markets, Donna Oosthuyse, says, “The JSE believes it is extremely important for holders of BEE scheme shares to be able to trade flexibly and realise their value. For some time the JSE has been reviewing our BEE Segment trading model to see if we could accommodate more BEE issuers and their investors. Clients and prospective clients are telling us that our new model works. We are pleased that we have found a route that works for MTN Zakhele.”
As part of this new scheme, it is possible, although not yet certain, that holders of MTN Zakhele ordinary shares at the time will be granted the opportunity of a partial reinvestment into the new BEE share scheme on terms yet to be determined. Further details regarding the above mentioned alternatives as well as the terms and conditions, timing and pricing thereof will be made available to the holders of MTN Zakhele ordinary shares at the appropriate time prior to the maturity of the current scheme.
Trading in MTN Zakhele shares remains restricted to eligible Black People or Black Groups until 24 November 2016, at which point several options are being considered. Options include a cash settlement equivalent to the value of their MTN Zakhele ordinary shares at the time, or a combination of MTN Group Limited shares and a cash settlement equivalent to the value of their MTN Zakhele ordinary shares at the time. The MTN Group Limited board is evaluating alternatives for a new BEE scheme that may come into effect on the expiry of the MTN Zakhele scheme in November 2016.