Listing of MTN BEE shares to go ahead

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The Johannesburg Stock Exchange (JSE) in Sandton, Johannesburg. (Photo: iStock)
The Johannesburg Stock Exchange (JSE) in Sandton, Johannesburg. (Photo: iStock)

Johannesburg - Mobile network MTN’s [JSE:MTN] black empowerment scheme will still make its stock exchange debut this week despite the company facing a $5.2bn fine in Nigeria.

Broad-based black empowerment scheme MTN Zakhele was launched in 2010 and helps previously disadvantaged South Africans to invest in the mobile network.

In September, MTN said the scheme had grown to a market capitalisation of R9bn.

The move to list the MTN Zakhele scheme on the black economic empowerment (BEE) segment of the Johannesburg Stock Exchange (JSE) has further come amid a directive from the Financial Services Board (FSB) to halt unlicensed exchanges, including over-the-counter (OTC) trades.

However, market commentators during the last week have asked questions about whether the Zakhele listing could still go ahead after MTN on October 26 confirmed that its Nigerian operations was hit with a $5.2bn fine for failing to disconnect five million unregistered SIM cards in a timely manner.

The announcement of the Nigerian fine resulted in a 20% drop in MTN’s share price and the temporary halting of trade in its stock on Monday, November 2 following unconfirmed reports about the mobile network agreeing to pay the fine. The JSE is also investigating MTN for the way the company made its announcement about the fine.

MTN, though, told shareholders in a market announcement on Tuesday evening that its Zakhele listing is still scheduled to go ahead.

“MTN Zakhele shareholders are advised that the listing of MTN Zakhele's ordinary shares (‘MTN Zakhele Shares’) as Asset Backed Securities on the BEE Segment of the main board of the JSE under the full name ‘MTN Zakhele (RF) Limited’ with the abbreviated name of ‘Zakhele’ (JSE alpha code of ‘MTNZBE’ and ISIN Code of ZAE000208526), will proceed on 5 November 2015,” said MTN.

“Furthermore, MTN Zakhele shareholders are referred to the cautionary announcement released by MTN Group Limited (‘MTN’) on 2 November 2015 and, as MTN Zakhele’s only material asset consists of shares in MTN, MTN Zakhele shareholders should consider the cautionary announcement, as well as subsequent announcements released by MTN relating thereto, when trading in MTN Zakhele Shares,” said MTN.

Meanwhile, the announcement of the Zakhele listing coincided with another SENS statement from MTN in which told shareholders that reports about it having reached a resolution with Nigerian regulators on the $5.2bn fine are ‘false’. In the SENS statement, MTN further said that it continues to engage with Nigerian regulators on the fine.

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