Payback for Telkom`s Khulisa shareholders
January 25, 2005
By Gugulakhe Masango
Johannesburg - Telkom`s black investors, who took advantage of the Khulisa scheme when the company listed in 2003 and who have held on to their shares, will qualify for an R88 million loyalty bonus in March.
Khulisa shareholders will get one extra share for every five shares they currently own.
The inclusion of the loyalty bonus in the Khulisa share scheme was meant by the ministry of public enterprises to promote long-term shareholding among black investors.
Investors who qualified for the Khulisa share offer, which catered for previously disadvantaged South Africans, paid R22.40 for their shares when Telkom made its debut on the JSE Securities Exchange and New York Stock Exchange on March 4 2003.
The scheme`s 52 567 shareholders owned 4.4 million shares in the Khulisa Share Trust at the end of September last year.
This means they qualify for 880 000 free loyalty shares, which would be worth over R88 million if sold on the open market.
The shares have more than quadrupled in value, and individual participation in the scheme was capped at R5 000 per person.
Belinda Williams, Telkom`s group executive of corporate affairs, said less than 15 percent of the Khulisa shareholders had sold since listing and for the remaining investors this `signals hope for long-term commitment`.
She said Telkom, through the Khulisa offer, had had an opportunity to expose a wider shareholder base to the creation of wealth.
`The growth in the share price for Khulisa shareholders shows that Telkom`s strategy to develop its people and empowerment is bearing fruit.`
Williams added that Telkom was committed to furthering the government`s objective of increasing share ownership by educating its retail shareholders on equity ownership.
Telkom shares rose R2.35 to close at R100.95 on the JSE yesterday. The telecoms sector increased 3.95 percent.
The shares of Africa`s biggest telephony company have climbed by 265 percent in the past year.
Steve Minnaar, a telecommunications analyst at Old Mutual Asset Managers, said the loyalty bonus was fantastic for Khulisa shareholders and `it`s nice profit for them, which is very positive`.
Some people in the market are concerned about the dilutionary effects of Telkom`s shareholding as a result of the loyalty bonus.
Williams said Telkom was not issuing new shares as the government was giving the shares to the scheme.
In terms of the Khulisa offer, black investors are to trade their Telkom shares without charge for three years. There are no prohibitive costs of disposing of the shares by black investors until the end of 2006.
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