"Investors express discontent towards MTN's Zakhele Futhi due to minimal profit yields"
In a significant development, shareholders of MTNZF, a telecommunications investment vehicle, are gearing up for a special cash distribution on July 28, 2025. The distribution, amounting to R20 per share, marks the start of the unwinding process for the scheme, which has been active for nearly nine years.
Launched in 2006, MTNZF has been an integral part of the South African telecommunications landscape. However, with the completion of the unwind, the company will transition into a cash-only entity, distributing the remaining proceeds to shareholders. After this process, MTNZF will delist from the Johannesburg Stock Exchange (JSE) and deregister, ceasing to operate as an investment vehicle.
The cash distribution is not the only payout shareholders can expect. A subsequent distribution of approximately R2.00-R3.00 per share is expected, depending on the proceeds from the sale of the remaining MTN shares held by MTNZF.
Shareholders are advised to update their bank account and contact information through the Shareholder Services centre to ensure a smooth payout process. Those who hold shares electronically (dematerialized) will have the payout go to their Central Securities Depository Participant or broker. Shareholders who hold certificated shares will receive the payout directly in their bank accounts.
It is important to note that due to the unwind process, MTNZF shares will effectively become a cash shell in the short term, changing their valuation basis. Those interested in selling shares on the JSE should consider the evolving liquidity and valuation changes as MTNZF transitions towards winding up.
The market conditions are influenced by the unwind sales of MTN shares by MTNZF and the transition of MTNZF into a cash shell, which affects share valuation and liquidity.
Not all shareholders are pleased with the returns from MTNZF. Nomvula Buthelezi, a Human Resources Practitioner, expressed her disappointment with the returns on her investment, while Luvo Grey, the secretary general of Progressive Blacks in ICT, stated that while MTNZF may have delivered modest capital returns, the financial outcome fell short of expectations.
The B-BBEE Commission has also flagged MTNZF for being inconsistent with the objectives of the B-BBEE Act, citing several restrictions and limitations placed on Black shareholders, which went against what the Codes of Good Practice require. This issue has been a point of contention and has raised questions about the effectiveness of similar BEE schemes by Vodacom, Telkom, and Cell C.
As MTNZF prepares for its final chapter, shareholders are encouraged to carefully consider their options and make informed decisions regarding their investments. For those wishing to cash out, the special cash distribution and the ongoing unwind process of the scheme present opportunities to do so. However, the potential volatility and changing valuation during this period should be taken into account.
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- As MTNZF wraps up its investment venture, shareholders might want to consider their personal-finance options, with the special cash distribution on July 28, 2025, and the subsequent distribution presenting chances for cashing out, although share valuation and liquidity might undergo changes during the unwind process.
- Given the transformation of MTNZF into a cash-only entity following the completion of the unwind, it is crucial for shareholders to update their bank account and contact information for a seamless payout process.
- Despite the cash distribution and the ongoing unwind process providing opportunities for shareholders to invest in other mobile and business ventures, the returns from MTNZF have raised concerns among some shareholders, with criticisms about inconsistencies with the B-BBEE Act and lower-than-expected financial outcomes.
