Black investors to get more of MultiChoice SA, Media24


September 28, 2006/busrep




Johannesburg - Black investors are in line to buy a further R2.8 billion worth of shares in MultiChoice South Africa and Media24, the local subsidiaries of listed Naspers, Africa\'s largest media company.

Naspers unveiled two separate deals this week in which it sold 15 percent in each of the companies for R2.25 billion and R730 million, respectively. Chief executive Koos Bekker said at the MultiChoice announcement that Naspers aimed for 30 percent black ownership of MultiChoice SA but that it would wait for the final empowerment codes before completing its deals.

Hein Brand, Media24\'s managing director, said while the board would make the final decision, the company would aim for a total empowerment shareholding of 25 percent.

Clarity from the department of trade and industry was essential to \"simplify the flow-through mechanisms to enable Naspers to evaluate its empowerment credentials\", Bekker said.

While this week\'s deals were broad-based and open to all black people with at least R200 in their pockets, it is not yet clear how further deals will be done.

Rajay Ambekar, a portfolio manager at African Harvest, said it was unlikely that Naspers would sell the extra empowerment stakes to well-known players.

Media24 already has empowerment partners in several of its divisions. The MultiChoice SA and Media24 deal are similarly structured.

Media24 will sell 14.6 million ordinary shares for R50 each to a new company called Welkom Yizani, which will sell the same number of shares for R10 each to the public and will sell 58.4 million R10 preference shares to Naspers to fund 80 percent of the deal. Dividends will be used to settle the debt and pay interest on the preference shares. Shareholders will need to hang onto their shares for at least five years before selling to another black person or black-owned company.

MultiChoice SA will be shifting 45 million shares in a similar deal with Phuthuma Nathi Investments.

An analyst, who asked not to be named, said he believed the Naspers empowerment deals would be very popular.

The deals have been welcomed in some quarters as representing proper broad-based empowerment, as they will involve thousands of black investors, not a few well-connected individuals.

But Duma Gqubule, the director of Kio, which specialises in black empowerment strategy and implementation, criticised them for not creating entrepreneurship or building sustainable wealth.

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