NEF to discount MTN shares for black people
26 June 2007

The National Empowerment Fund (NEF) will give away R260 million in the form of a 20 percent discount on the sale of R1.3 billion in MTN shares to encourage the participation of black individuals in the equity market.

"NEF will be selling half of its 1.5 percent holding in MTN at a 30-day volume-weighted average share price in July," said NEF chief executive Philisiwe Buthelezi.

"Our target approach is to allocate 50 percent of the shares to savings and investment groups and the other 50 percent to black individuals [half of which must be women]," Buthelezi added.

In 2003, Telkom sold its discounted Khulisa shares to more than 52 000 historically disadvantaged people at R22.40 a share. The shares today trade at R178.45.

However, people would benefit better if they participated in the NEF scheme because they would be educated on the equity market, buy shares at a discount and have immediate acquisition of the shares.

"There will be no third party involved," Buthelezi explained, adding that it normally took up to 10 years to obtain immediate economic benefit for investors when using other schemes.  Participation would be extended equitably across all provinces to uplift those who lag behind in black economic empowerment deals. The shares would be allocated to ensure a provincial bias in accordance with the population size of the target market per province.

Victor Mabuza, the executive for asset management, said the fund was targeting about 150 000 individuals and 100 000 groups.

The shares would be sold at a minimum subscription of R2 000 and a maximum of R50 000 for individuals and R100 000 for stokvels and other savings groups.

To be a participant in the scheme investors must be black, over 18 years of age, have a valid South African identity document, a bank account and proof of residence.

Mabuza said the offer had a one-year lock-in period.  To encourage long-term investment, Buthelezi said: "Investors who hold the shares for 24 months will receive bonus shares of one for every 10 shares held."

The offer will be for three weeks from July 23 at any post office.

Simon White of the Stokvel Company said the scheme was exciting and revolutionary, as it was the first initiative focusing on burial societies and savings organisations.

"The 20 percent discount is a huge contribution and investment by the government in targeting black individuals and stokvels."

Ntebo Mmope, www.busrep.co.za