BBBEE investment windfall from Multichoice

Pay television giant MultiChoice is set to distribute R900m as 2013 dividend to its broad based black economic empowerment (BBBEE) partners in a development which will make the initiative one of the best performing BBBEE investment initiatives.
The owner of M-Net and SuperSport, MultiChoice, facilitated in 2006 a discounted sale of its shares to black investors via two vehicles called Phuthuma Nathi Investments and Phuthuma Nathi Investments 2. The performance of the BBBEE scheme is remarkable when seen against the general performance of many other BBBEE equity schemes which make the space look like a mass graveyard. This is provocative development coming out of MultiChoice, a subsidiary of Naspers.
In a statement released yesterday MultiChoice said the Phuthuma Nathi companies will receive an ordinary dividend of R480 million, compared to R400 million paid last year. They will also receive a special dividend of R420 million.
In turn, the Phuthuma Nathi companies will pay shareholders an ordinary dividend of 142,22 cents per ordinary share plus a special dividend of 124,44 cents per ordinary share. This means Phuthuma Nathi shareholders will receive dividends amounting to 266,66 cents per ordinary Phuthuma Nathi share,  compared to 118,5 cents paid last year. This represents a significant increase of 125%.
“We are very proud that Phuthuma Nathi Investments have been paying dividends since inception.  The ordinary dividends received by Phuthuma Nathi shareholders have more than tripled, growing from 43,3 cents per share in 2007 to 142,22 cents per share in 2013. With this year’s special dividend, Phuthuma Nathi shareholders have to date received R6,88 per share,” said Nolo Letele, Executive Chair of the MultiChoice South Africa Holdings group.
The company said the special dividends have also been paid to reduce the original debt incurred when the scheme launched in 2006. “If MultiChoice continues to do well and is able to pay dividends, the preference share debt will be paid off in the coming years and the amount of dividends received by shareholders should increase even further over time”.
Mandla Langa, Chair of both Phuthuma Nathi companies said “Phuthuma Nathi has enabled ordinary black South Africans to invest in an innovative and cutting edge company. We are delighted that over 87% of our shareholders have held on to their shares since inception of the schemes”.
Langa added that shareholders who bought Phuthuma Nathi shares when the schemes launched in 2006 and 2007 at R10 per share, have seen a significant increase in the value of their investment. “The Phuthuma Nathi shares closed at R102.00 per share on 02 September 2013. This represents a capital growth of more than 900%”.


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