MTN Group has proposed extending the 2016 MTN broad-based BEE scheme operated through MTNZF by three years.
The proposed extension of the scheduled maturity date of the scheme by three years — to November 23 2027 — would increase the overall term of the scheme to 11 years from its inception in 2016, the group said in a statement on Monday.
The proposed extension of the scheme had merit for MTNZF ordinary shareholders, rather than unwinding the scheme on the presently scheduled maturity date, it said.
During the extension period, the MTNZF board would have the discretion to realise or lock in value by partially or fully unwinding the scheme and/or by entering into derivative transactions in respect of the MTN shares held by MTNZF, subject to applicable consents, it said.
MTN may assist in expediting any unwind of the scheme during the extension period through a specific repurchase of the MTN shares held by MTNZF, approval for which will be sought from MTN shareholders at this time as part of the approvals for the proposed extension of the scheme.
In addition to its own costs, MTN will bear the approved costs incurred by MTNZF for the extension of the scheme.
MTN said the decision to extend the scheme was taken considering the effect of the devaluation of the naira over the past 14 months on the reported earnings and valuation of the MTN Group.
It also considered the MTN share price, which on August 14 was R84.97. The MTN shares are MTNZF’s only material asset and the underlying asset that informs the value of the MTNZF shares. The scheme is projected to owe about R620m to the preference share funders and R6.1bn to MTN at the present scheduled maturity date.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.