The MTN share price continued to rise this morning in reaction to news that government has found a buyer for the remainder of its shares in the group.
The share rose by 140c or 4.3% on Friday to close at R34.20, after touching an intraday high of R34.35. By midmorning today the share was trading another 40c higher at R34.60.
On Friday public enterprises minister Jeff Radebe named Umthunzi Telecoms Consortium as the preferred bidder for the 5% stake in MTN held through Transnet and the Transnet M-Cell Trust.
"Umthunzi`s appointment follows a unanimous decision of the transaction`s bid evaluation committee made up of officials from the department of public enterprises, national treasury and Transnet," he said.
The members of the consortium are The African Vanguard Social Development Trust, Ariska Investments, Newshelf 734, The Zungu Family Trust, Freefall Trading 165, New Adventure Investments 274, African Vanguard Rural Development Trust, Nozala Trust, Sarhwu Enablement Trust and The National Association of People living with HIV/AIDS.
"Government expects the transaction`s value to be about R2.4 billion. We also expect final negotiations with the consortium to be completed within about two weeks."
Radebe says the proceeds will be retained by Transnet and the M-Cell Trust.
Government began selling its then 23% stake in MTN in 2000 as part of the restructuring of Transnet and the reorganisation of its financial operations.
In July 2000 government converted the MTN stake into shares in holding company M-Cell. As part of that agreement it sold 75 million shares to the Johnnic Group for R2.48 billion.
"In January 2002, the monetisation of another 20% of our MTN stake raised a further R5.3 billion, and the state has since received dividends to a total value of some R1.76 billion," Radebe says.
Share