SHARE OFFESHARE OFFER R
MTN’s empowerment scheme failed to fly
Analysts lacerate new MTN scheme as poorly timed, too complicated and badly priced
MTN’s decision to have a share placement at the same time as its new black economic empowerment (BEE) scheme was just one of several reasons the BEE scheme flopped. This was the view of a BEE fund manager on Tuesday after the cellphone group announced it had raised R2.3bn through the placement of 21-million shares. The money will be used to pay MTN Zakhele shareholders who are cashing in. Although the placement volume was small, it was another factor contributing to the generally bearish sentiment around MTN and helped to explain why the new MTN Futhi scheme failed to raise the modest R2.5bn targeted. BEE schemes are not meant to be free, but they are meant to be sufficiently attractive to ensure success. Even the recent ridiculously overpriced Dis-Chem initial public offering was seven times oversubscribed. The take-up of the MTN Futhi offer fell R500m short of its R2.5bn target — a 20% shortfall. Analyst Riaz Gardee described the latest MTN BEE scheme as far less promising than th...
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.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.