MTN extends Zakhele Futhi to Nov. 2027, bolsters black ownership

MTN Group, Africa’s largest telecom services provider, has extended the maturity of its flagship Black ownership vehicle, MTN Zakhele Futhi (MTNZF), to November 2027, reinforcing its long-term empowerment strategy while preserving capital flexibility.

The extension ensures continued participation for Black investors in Africa’s largest telecom operator and delays the unwinding of a structure that has been central to broadening ownership. Originally scheduled to mature in November 2022, the scheme now gains additional time as MTN balances inclusive ownership with disciplined capital management.

How the ownership structure works

Launched in 2016 as a successor to the earlier MTN Zakhele scheme, the special-purpose vehicle (SPV) enabled qualifying investors to acquire indirect exposure to MTN shares. At inception, the vehicle held approximately 77 million shares, representing about 4% of the group’s issued share capital.

As of June 30, 2025, the Company realised a profit of R2.759 billion ($168.12 million, swinging from a loss of R239 million ($15 million) in the prior period. The profit in the period under review is largely attributable to the dividend received and the de-recognition of the derivative financial instrument.

The Company also received R265 million ($16.16 million) in dividend income from MTN, used, firstly, to pay the Company’s permitted operational costs and tax, with the remainder of the dividend income being used to pay dividends owing to the preference shareholders and to reduce the capital portion of the debt owing to the preference shareholders.

Share count and capital adjustments

Equity contributions, including reinvestments from earlier participants, are treated as a premium for a future option to acquire shares outright. This has resulted in a share-based payment reserve of about R4.04 billion ($246.63 million) on MTN’s balance sheet.

As of 2025, MTN reported issued share capital of roughly 1.83 billion shares, down from 1.88 billion a year earlier following the cancellation of more than 50 million shares. Meanwhile, approximately 76.8 million shares linked to the Zakhele Futhi scheme remain excluded from the official share count under IFRS rules.

A year ago, Zakhele Futhi sold 23,768,040 MTN ordinary shares held in an accelerated bookbuild offering and received about R3 billion ($183.1 million) from the sale and settled the accrued preference share dividends and the outstanding preference share capital balance in its entirety on 19 June 2025.

What the 2027 extension means

MTN Zakhele Futhi, set up as a ring-fenced, special purpose vehicle through which qualifying members of the Black Public indirectly invest and hold shares in MTN Group, a leading emerging markets telecommunications service provider. MTN Zakhele Futhi initially holds approximately 77 million MTN Group Shares, amounting to approximately 4% of MTN’s issued share capital, supporting MTN’s status as a leading BEE-driven telecommunications company.

The group’s share premium rose to R37.48 billion ($2.29 billion), supported in part by a R442 million ($27 million) recognition tied to the scheme. These adjustments reflect MTN’s ongoing effort to manage dilution while sustaining empowerment-linked ownership structures.

The extension of Zakhele Futhi underscores MTN’s commitment to inclusive ownership while maintaining control over its capital structure. As the revised maturity approaches in 2027, the eventual unwinding of the scheme is expected to shape shareholding dynamics and influence market liquidity.