MTN chief's and Cyril's windfall

[MickeyD]

I was under the impression that the Zakhele share scheme was to empower those who were previously disadvantaged and in need of upliftment and enrichment? Looks like the big boys have climbed in, boots and all!!!

Johannesburg - Outgoing MTN Group [JSE:MTN] CEO Phuthuma Nhleko may have secured himself hundreds of millions, thanks to his participation in the company's black economic empowerment (BEE) share offer.

The Zakhele BEE share scheme offer had been more than 1.7 times oversubscribed and applicants could not get all the shares they had applied for.

About a week ago Nhleko also became R400m richer after selling 3.2m shares at the market price.

According to MTN, this deal was done partly because of commitments following a transaction with a commercial bank.

But Nhleko is not the only one benefiting greatly from the Zakhele offer.

Cyril Ramaphosa’s Shanduka Group received more than 11% of the shares on offer.

MTN had offered the public 80.9m shares at R20/share.

On Friday the company's share price closed at R125.50.

Zakhele shares are not currently freely available on the market. When they are, the just over 2m shares (2.5% of the offer) that Nhleko and his wife bought at the current price will be worth R250m - netting a profit of more than R200m.

Nhleko bought the shares at R20 each for a total price of R40.2m.

Shanduka’s 9.3m shares (bought for R187m) will then be worth R1.16bn - netting a profit of almost a billion rand should the current share price remain at this level.

According to MTN the offer had raised some R2.8bn for the company.

The 1.7 times oversubscription meant that about 137.5m Zakhele shares had been applied for.

MTN said that all black employees and directors had been entitled to participate in the scheme. The directors had been able to buy the shares at the same price as the public could.

Apart from Shanduka and Nhleko, other MTN directors together bought 760 000 of the 80.9m shares.

According to MTN, more than 98% of the applications had been from individuals, 94% of whom had received all the shares they applied for.

Kaplan Equity Analysts expert Irnest Kaplan explained that companies generally applied a formula when an offer was oversubscribed.

One might wonder whether the formula had been equitably applied, he said. Someone might, for example, have applied for 200 shares and received only 100.

According to the same formula someone might have applied for 10m shares and received only a million. So, he asked, had the formula been fairly applied?

http://www.fin24.com/Companies/ICT/MTN-chiefs-windfall-20101128

 

[blunomore]

They are following the Christian principle straight out of the bible:

"To those who have, shall be given. From those do no not have, will be taken away"

 

[marine1]

TIA welcome to the rot

 

[Vrotappel]

Funny as a non-black I never had these 'windfalls' prior to '94.

 

[the354]

Shameless.
Let them eat Cake.

 

[blunomore]

Funny as a non-black I never had these 'windfalls' prior to '94.

You had access to a better education, you had job reservation for white people, you had better infrastructure in the areas where only you and people like you could live, etc.

I honestly thought the debate on whether white people were better off pre-1994 has been closed.

 

[Vrotappel]

You had access to a better education, you had job reservation for white people, you had better infrastructure in the areas where only you and people like you could live, etc.

I honestly thought the debate on whether white people were better off pre-1994 has been closed.

Do I know you? Only a person that knows me will know if what you have stated as fact is in fact fact. Also you missed the point of my post.

 

[Y'all Qaeda]

Isn't there usually a time period in which these shares cannot be sold?

 

[blunomore]

Do I know you? Only a person that knows me will know if what you have stated as fact is in fact fact. Also you missed the point of my post.

It was factual re: the pre-1994 scenario. Think wider....

 

[sox63]

Its amazing how this is reported! Of an initiative that raised over R2.8 Billion, they choose to focus on a few people? If those people had benefited the most, I would understand, however in this case MTN Black directors have less than 20% of the entire offer. And in their effort to paint Ramaphosa as the major beneficiary of this offer, they neglect to mention the Community Trusts and Lilitha Investment trust for Women that are shareholders in Shanduka. And for that matter, they leave out Standard Bank and Investec who are also going to benefit.

Epic reporting fail, IMO. Hundreds of thousands of Black South Africans took advantage of this offer, how about reporting on that?

 

[blunomore]

Isn't there usually a time period in which these shares cannot be sold?

Yes, for as long as it takes to pay off the loan used to pay for (subsidise) the shares.

The article is saying that when the shares become eligible for sale, they will be worth RXXX.

 

[blunomore]

Its amazing how this is reported! Of an initiative that raised over R2.8 Billion, they choose to focus on a few people? If those people had benefited the most, I would understand, however in this case MTN Black directors have less than 20% of the entire offer. And in their effort to paint Ramaphosa as the major beneficiary of this offer, they neglect to mention the Community Trusts and Lilitha Investment trust for Women that are shareholders in Shanduka. And for that matter, they leave out Standard Bank and Investec who are also going to benefit.

Epic reporting fail, IMO. Hundreds of thousands of Black South Africans took advantage of this offer, how about reporting on that?

1. I read it quickly, but they do seem to imply these guys got all the shares they applied for? How is that possible if it was oversubscribed ?

2. As far as millionaires/billionaires are concerned, my vote still goes for the application of the "once empowered, always empowered" principle, which is clearly not applied here!

 

[sox63]

1. I read it quickly, but they do seem to imply these guys got all the shares they applied for? How is that possible if it was oversubscribed ?

2. As fas as millionaires/billionaires are concerned, my vote still goes for the application of the "once empowered, always empowered" principle, which is clearly not applied here!

There is no mention of the ratio of how much the directors applied for and received in the article.

Regarding you own personal pricinciple, its just that your own personal opinion. Its not standard business practice when it come to BBBEE...

 

[blunomore]

Regarding you own personal pricinciple, its just that your own personal opinion. Its not standard business practice when it come to BBBEE...

Did I say it is government principle?? Of course not. However, it you took trouble to read the media extrensively, you may remember that this has often been raised.

And if you think it is OK for the gap between rich and poor to widen even further, I sincerely hope the poor do not come for you first, because come they will come....