The proposed extension of conditions for MTN Zakhele Futhi's (MTNZF) B-BBEE deal has been commended for providing shareholders with potential future upside.

A senior investment analyst pointed out yesterday that unwinding now will likely crystallize the value lost, with the majority of the profits going towards debt settlement within the MTNZF structure.

Peter Takaendesa, head of equities at Mergence Investment Managers, feels that extending the terms of the empowerment plan, which was set to expire on November 22, 2024, will provide better value to shareholders.

“If approved this would give MTNZF shareholders potential upside should the MTN group share price recover from the major foreign currency shocks seen so far and it stays above the R90 level until they unwind the transaction. Unwinding now is likely to crystalise the value lost and most of the proceeds will go towards settling debt within the MTNZF structure,” he said.

The MTN Group and MTNZF proposed extending the scheme's duration by three years, to November 2027, as it announced its financial results for the six-month period ending 30 June 2024 on Monday.

The three-year extension of the scheduled maturity date of the scheme increases the overall term of the scheme to 11 years from its inception in 2016.