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21 October 2010 23:14

Zakhele shares oversubscribed: Nozipho January-Bardill – group executive, corporate affairs, MTN Group

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    Dividends only after six years or so, but shares could perhaps be sold after three.

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    ALEC HOGG: Well, Tsidi, you've been doing a little bit of homework of your own, looking into the MTN Zakhele share offer.

    TSIDI BISHOP: Yes, Alec. We spoke to Nozipho January-Bardill today, who's going to tell us more about how they managed to attract 240 000 subscribers.

    ***
    TSIDI BISHOP: MTN says it has had an overwhelming response to its MTN Zakhele BEE public offer. The offer which closed on October 14 was more than 1.7 times oversubscribed. R2.8bn was raised from 124 000 applicants. MTN group executive Nozipho January-Bardill is here to tell us more.

    ***
    TSIDI BISHOP: You say the shares are going to be locked in for three years, and dividends can't be paid until you've paid debt.

    NOZIPHO JANUARY-BARDILL: That's correct.

    TSIDI BISHOP: How long roughly - I know it could be a bit of a scrub here - how long do you think you are going to take to be able to pay off your debt?

    NOZIPHO JANUARY-BARDILL: Well, by saying that people are locked in for a maximum of six years we are assuming that after six years that debt will everybody paid back so that people can then trade their shares on the open market. But we are also saying that after three years we feel confident enough that people will be able to trade their shares within the Zakhele family, if you like, within in the Zakhele environment, on a  willing-buyer, willing-seller basis, with the advice of the directors of Zakhele. So if you have bought you could possibly sell after three years - but within the Zakhele environment, among the Zakhele investors. It will be what we call a limited controlled kind of trading.

    TSIDI BISHOP: Like in any other game of buying shares and selling shares, it depends on what happens to the share price.

    NOZIPHO JANUARY-BARDILL: Exactly.

    TSIDI BISHOP: What is the likelihood of MTN shares falling?

    NOZIPHO JANUARY-BARDILL: Well, you know, as we say to people, there is always risk when you buy shares. Buying shares is not a risk-free process. What people have demonstrated in being oversubscribed is the confidence that they have in the Zakhele share scheme because, if they didn't want to gamble at all, if they were very risk-averse, then we would have advised them, really, if you don't want to go this way, rather put your money in a  bank where you are guaranteed that you'll get some interest on it. But when you are buying shares, there is always an element of risk and that risk is really embedded in the environment in which the industry is operating - and MTN specifically - and how that environment will affect the share price.

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