MTN Zakhele received R836 million in dividend income from MTN Group for the 2014 financial year but the Black Economic Empowerment (BEE) scheme will not be paying dividend to its investors.
This is carried in the 2014 MTN Zakhele financial results which were published yesterday. The dividend income was much improved when compared to the R658 million received in 2013.
MTN Zakhele directors said the dividend income was first used to pay for operational costs as well as taxes. Thereafter, the dividend income was used to pay down MTN Zakhele’s debt.
MTN Zakhele chairperson Thulani Gcabashe said “The sustained solid operational performance of MTN Group ensured that in 2014 MTN Zakhele has been able to further reduce its levels of debt and strengthen its financial position.”
Gcabashe added that it remains the intention of MTN Zakhele not to declare dividends in respect of MTN Zakhele shares until all of its funding liabilities have been settled, in accordance with the funding agreements.
“Over the years, the Company has benefited from this stance, steadily reducing the cost of debt. The board remains confident that this is the right approach. Alongside MTN Zakhele’s robust funding structure, this approach will continue to benefit shareholders in years to come.”
He also noted that “2014 also marked the first full year of trading in MTN Zakhele shares via the MTN Zakhele share trading platform. Robust trade and a sharp increase in the share price highlight the value that investors continue to see in the scheme, said Gcabeshe.
At the end of December 2014, the MTN Zakhele share traded at R108.50 per share. The share is currently trading in the region of R122.00, more than six times the R20 investors paid for each share in 2010.
Gcabashe is set to step down as Chairman of MTN Zakhele. This is after his appointment as Chairman of the Standard Bank Group effective from 28 May 2015.
MTM Zakhele also announced that it was still pursuing on the listing of its shares on the JSE to fulfil demands from the Financial Services Board.
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