MTN will formulate a BEE transaction in the early part of the new year, and has concluded a memorandum of understanding (MOU) with the Public Investment Corporation (PIC) to facilitate it.

According to a statement released by MTN today, MTN currently obtains its equity ownership points in terms of the Codes of Good Practice from the 13,1% shareholding which Alpine Trust, through Newshelf 664 (Pty) Ltd, holds in MTN.
The Newshelf Structure was established independently of MTN in 2002, and Alpine Trust was designed to be unwound in December 2008. As soon as possible after 22 December, this will happen and may lead to a significant reduction in the number of MTN ordinary shares held by or for the benefit of historically-    disadvantaged South Africans.
To this end, the organisation is proposing new new BEE transaction whereby AT beneficiaries can continue their long-term relationship with MTN by reinvesting a material portion of their benefits from the Newshelf Structure in the BEE transaction.
It is envisaged that the BEE transaction will comprise between 5% and 6% of MTN's issued ordinary share capital, which would equate to between 21,2% and 25,5% of MTN's South African operations
In terms of an agreement with PIC, Newshelf and AT, Newshelf will acquire sufficient MTN ordinary shares on loan account from PIC to enable Newshelf to declare the shares as a dividend in specie to AT.
In terms of the MOU, MTN has agreed, in principle, to acquire the entire issued ordinary share capital of Newshelf, or the call option rights thereto, from PIC for its residual nominal value.
PIC has also undertaken in the MOU to make available from its equity portfolio up to 6% of MTN`s issued ordinary share capital for purposes of the BEE transaction.
Black member of the public, eligible employees of MTN and black South African non-executive directors of MTN are expected to participate in the BEE transaction.
In addition, as part of its empowerment initiatives, MTN intends establishing an employee share ownership plan that will benefit eligible employees of MTN, who do not participate in any of MTN`s existing employee incentive schemes.