The liquidity of MTN Zakhele Futhi has been impacted by MTN’s decision not to declare a dividend in its financial results for the six months ended 30 June 2020.
The decision by MTN Group would affect MTN Zakhele Futhi’s ability to pay expected preference dividends.
MTN Zakhele Futhi scheme, which is listed on the JSE, has entered discussions with MTN and the preference share funders to find solutions to mitigate the impact.
“Further to the cautionary announcements dated 3 August 2020 and 6 August 2020, MTN Zakhele Futhi shareholders are advised that the funding from MTN in the amount of R15 million has been finalised resolving the current liquidity shortfall,” MTN Zakhele Futhi informed investors on Friday.
“MTN Zakhele Futhi advised investors to continue exercising caution when dealing in its 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 MTN Zakhele Futhi’s ordinary shares.”
Preference shares were subscribed for by third-party debt providers on MTN Zakhele Futhi’s establishment, and dividends are treated as an interest expense.
MTN’s Zakhele-Futhi is a ring-fenced special purpose vehicle aimed at facilitating investment by previously disadvantaged South Africans in MTN Group (MTN).
It holds about 77 million shares in MTN, amounting to 4% of MTN’s issued share capital.
It also has about 89 000 shareholders holding 123.4 million MTN’s Zakhele-Futhi ordinary shares.