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Home»Boardroom Games»MTN Zakhele Futhi Gets R75 Million Bailout
Boardroom Games

MTN Zakhele Futhi Gets R75 Million Bailout

Gugu LourieBy Gugu Lourie2021-04-23No Comments2 Mins Read
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MTN Zakhele Futhi
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MTN’s black economic empowerment scheme, MTN Zakhele Futhi, gets R75 million bailout to avert a cashflow crisis. 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 scheme is a ring-fenced special purpose vehicle aimed at facilitating investment by previously disadvantaged South Africans in MTN Group (MTN).

MTN had suspended its final dividend as it focuses on faster debt reduction at its holding company even after posting a surge in 2020 earnings.

Furthermore, on 10 March 2021. MTN announced that as a result of uncertainties around cash upstreaming from Nigeria, the timing of their asset realisation programme proceeds and the impact of COVID-19, it was suspending its dividend policy and would not be declaring a final dividend for the financial year ended 31 December 2020.

As the scheme’s only material investment and asset consist of MTN shares, the empowerment company is entirely dependent on the receipt of dividends from MTN. The suspension of MTN’s dividend policy has therefore had a significant impact on the ability of the scheme to continue as a going concern and created material uncertainty around this assumption.

“We would like to thank MTN for their continued commitment to support MTN Zakhele Futhi and its shareholders through the further provision of additional financial assistance up to the amount of R75 million to enable the company to meet its cash requirements for the next 12-month period,” MTN Zakhele Futhi said.

 

“The amounts provided by MTN to address the liquidity issues being faced by MTN Zakhele Futhi have negatively impacted the gearing in the Company due to the interest-bearing nature of all funding provided by MTN Holdings.

 

“The MTN Zakhele Futhi board will continue with their efforts to protect the investment made by its shareholders.”

Also read: Again MTN Zakhele Futhi Move To Avoid Liquidity Crunch

 

 

BBBEE empowerment scheme mtn zakhele futhi YeboYethu
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