MTN Zakhele hosts second AGM
|Issued by: MTN|
[Johannesburg, 1 October 2012]
MTN Zakhele held its second Annual General Meeting (AGM) in Johannesburg last week. The purpose of the AGM was to approve resolutions proposed in the notice posted to shareholders in August 2012.
One of the most significant achievements for MTN Zakhele is the accelerated reduction of debt through the ongoing receipt of dividends from MTN Group Limited (MTN). The MTN dividends received during April and September 2011 exceeded the obligations under the preference share funding arrangements. In April 2012, the Class B preference shares were fully repaid and only the Class A preference shares remain together with the Notional Vendor Finance (NVF) funding.
Addressing the AGM, MTN Zakhele Chairman Thulani Gcabashe reported on the financial results to 31 December 2011, underpinned by a sound operational performance of the MTN Group.
"It is with great pleasure that I report on the first full year of results for MTN Zakhele as the company's position continues to improve through the reduction of debt. The company has no business other than holding MTN shares and administering the associated funding. Its success is therefore wholly dependent on the success of MTN and the ongoing receipt of dividends to service and repay debt," said Gcabashe.
The effective reporting of the 2010 financial year for MTN Zakhele was less than two months as the allotment of the ordinary shares to successful candidates only took place on 24 November 2010. The 2011 financial year is therefore the first full year of meaningful results. When MTN concluded the MTN Zakhele scheme in 2010, it was one of the more successful Broad-Based Black Economic Empowerment (BBBEE) transactions.
The success of the structure has not waned over the past year, as MTN continued to deliver strong cash returns to shareholders. MTN also benefits from MTN Zakhele’s ownership of its shares. Together with its other transformation and empowerment initiatives, MTN was ranked 40th in the 2011 annual Financial Mail survey of the 100 most empowered listed companies in South Africa.
Gcabashe also informed shareholders that much time and attention has been spent on ensuring that MTN Zakhele complies with the requirements of King III and the new Companies Act 71 of 2008, as amended.
"It is expected that all these efforts will provide a sound platform on which to continue to develop and improve the effectiveness of the company as its obligations and responsibilities increase. These would include the future trading of the MTN Zakhele shares between existing shareholders, anticipated at the end of 2013.
"Moreover, the sound operational performance of MTN to date and the committed dividend payout ratio combined with the robust funding structure gives me great confidence for MTN Zakhele in the year ahead," said Gcabashe.
The R8.2 billion MTN Zakhele transaction was concluded in 2010 as part of MTN's ongoing efforts to further its BBBEE objectives in South Africa. An invitation was issued to the black public (individuals and groups) to participate in the growth of the MTN Group through subscribing for MTN Zakhele shares at R20 a share, with a minimum purchase of 100 shares for R2 000 in order to qualify.
The offer generated widespread interest across South Africa, raising R2.78 billion from black investors, a subscription level of 1.7 times. MTN Zakhele now has 121 151 BBBEE shareholders who indirectly own a part of the MTN Zakhele 4% equity in the MTN Group.
MTN Zakhele is to date South Africa’s largest empowerment scheme in the telecommunications industry. Its structure is expected to run for a six-year period, although investors can sell their shares after year three to other black investors.
Please visit the MTN Zakhele Web site: www.mtnzakhele.co.za.