MTN Zakhele, the retail styled BBBEE scheme of telecoms giant MTN Group, was drumming up its trading platform today in preparation for the launch of buying and selling of its shares scheduled to start on Monday 25th of November 2013.
MTN Zakhele board chairperson Thulani Gcabashe said the platform was ready for action and they were expecting considerable interest because there is value in the shares to be traded in an over-the-counter (OTC) platform.
Take up figures announced yesterday show a slow start to the trading registration process. All who want to trade, buyers and sellers, in MTN Zakhele shares must be registered in the new platform. Sydney Mahlarhi an executive of Tamela, consultant to MTN Zakhele, said total registration had reached about 13500 yesterday. The scheme has about 120000 shareholders. A last minute rush is expected to occur in the next few days.
The MTN Zakhele BBBEE scheme was established in November 2010 through a mix of cash contribution from black investors, loan funding and a donation from MTN Group. Investors paid in R20 per MTN Zakhele share and got indirect exposure to MTN Group shares which were trading at about R100 back then. MTN Group share price is now trading around the R200 per share mark.
Gcabashe said due to the strong performance of the MTN share price and dividends received, the scheme has been able to reduce its more expensive funding obligations more quickly than anticipated. “The success of MTN Zakhele is dependent on the performance of the MTN share price, as well as the ongoing receipt of dividends to service its funding commitments,” said Gcabashe. Furthermore, the implementation of the refinancing approved at the July 2013 AGM has improved the financial position of MTN Zakhele by replacing more expensive funding with cheaper funding.”
MTN Zakhele statement noted that the scheme has a net asset value of about R8.5 billion (30 Jun 2013) compared to R3.4 billion at inception of the scheme in 2010.
“The current MTN Zakhele net asset value per MTN Zakhele ordinary share of R104.63 (30 June 2013) has grown from R75.45 in December 2011, said Gcabashe. This represents a Compound Annual Growth Rate of 24%. The growth is largely attributed to the growth in the MTN Share price and the increased dividends received from MTN.”
Gcabashe cautioned that the net asset value was not necessarily an indicator of the value at which the MTN Zakhele ordinary shares will trade.
“The trading price of the MTN Zakhele ordinary shares will depend on, amongst other things, demand on the trading platform and liquidity,” said Gcabashe.
Gcabashe noted that at the MTN Zakhele shareholder base is made of a broad base of black individuals, stokvels, trusts and investment companies. “This diverse shareholder body is expected to contribute towards liquidity”.
“We do expect interest and trade in the shares because there is value in the shares. Shareholders need to decide as part of their own wealth creation plans what their approach will be – to sell, hold or acquire more MTN Zakhele ordinary shares. We have provided our shareholders nationally with investor education and registration seminars and information on how to trade.”
“We have provided a controlled, secure and cost-effective platform for shareholders to trade,” says Gcabashe. “We have a diverse shareholder base and it is essential that we provide support and transparency.”
The MTN Zakhele statement noted that the scheme administrators cannot provide a price at which the MTN Zakhele ordinary shares will trade. “The MTN Zakhele share price will be the determined by the market of buyers and sellers. However, a number of independent analysts, noted the statement, have, subject to qualifications, valued MTN Zakhele at between R120 and R143 per MTN Zakhele ordinary share.
The MTN Zakhele trading platform is offered through an online tool and call centre.The MTN Zakhele dedicated call centre is 083 123 6869 and websitewww.mtnz.co.za. These are the official channels through which shareholders and potential investors can register and access detailed information.