MTN Zakhele Futhi averts cashflow crisis with R15m funding
ITWEB - FINANCIAL / 21 SEPTEMBER 2020 - 14.54 / SAMUEL MUNGADZE
MTN’s black economic empowerment scheme, Zakhele Futhi, has received R15 million funding after its cashflow was impacted by MTN’s decision not to declare a dividend in its financial results for the six months ended 30 June.
Last month, it was announced MTN Zakhele Futhi (MTNZF) was in talks with MTN to avert a cashflow crisis after the mobile operator halted its interim dividend in a bid to preserve cash.
The scheme’s shareholders were notified at the beginning of August that its only asset and material investment consisted of MTN shares and due to the telco not paying a dividend, its cashflow would be impacted.
“The fact that MTN has stated that it will not be paying an interim dividend impacts MTNZFs liquidity and, hence, its ability to pay scheduled preference dividends. MTNZF is entering into discussions with MTN and the preference share funders to find solutions to mitigate the impact,” MTNZF said at the time.
On Friday, MTN Zakhele Futhi announced the matter had been mitigated.
“Further to the cautionary announcements dated 3 August 2020 and 6 August 2020, MTNZF shareholders are advised that the funding from MTN in the amount of R15 million has been finalised, resolving the current liquidity shortfall,” said the scheme.
However, it added: “MTNZF shareholders are advised to continue exercising caution when dealing in MTNZF ordinary shares until the company’s interim results for the six months ended 30 June 2020 are released, as there may be other liquidity issues which may have a material effect on the price of MTNZF’s ordinary shares.”
MTNZF is a ring-fenced special purpose vehicle aimed at facilitating investment by previously disadvantaged South Africans in MTN Group. The entity holds close to 77 million shares in MTN, amounting to approximately 4% of MTN’s issued share capital.
The company debuted on the JSE in November last year.
Meanwhile, MTNZF last week appointed Belinda Mapongwana as chairperson of the company’s board effective from 16 September, as Sindi Mabaso-Koyana stepped down from the position and will be joining the MTN group board.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER