COMPANY NEWS IN BRIEF

MTN working with JPMorgan

MTN, Africa’s largest phone company, is working with advisers at JPMorgan Chase & Co. on the planned separation of its financial technology business, people with knowledge of the matter said.

The carrier said last month it aims to complete a carveout of the business by the end of the first half before seeking funds from outside investors later in the year. Last year, Nedbank estimated the fintech arm could be worth about R88 billion.

MTN is studying a variety of potential deals, including bringing in partners for some of its businesses as well as possibly listing certain units in the future, to unlock value and pay down debt. The carrier is also exploring options for its data centre business, the people said, asking not to be identified because the information is private.

The telecom carrier is separately working with FTI Consulting Inc. to find ways to boost revenues from its wholesale business and roaming agreements across the markets where it operates, one of the people said.

Shares of MTN have roughly doubled in Johannesburg over the past 12 months, giving the company a valuation of about US$22.3 billion. Deliberations are ongoing, and there’s no certainty they will lead to any transactions, the people said. -Fin24/Bloomberg

PepsiCo launches R1.6 billion scheme

Food and beverage company PepsiCo sub-Saharan Africa has launched Bašumi Trust, a R1.6 billion Broad-based Black Economic Empowerment (BBBEE) employee share ownership plan (ESOP).

In a statement on Tuesday, PepsiCo said the trust is part of the conditions of the US group’s R24 billion acquisition of local food and beverage producer Pioneer Foods in 2020.

The trust owns R1.6 billion in shares in the US giant PepsiCo, which is listed on the Nasdaq in New York. The trust paid out its first dividend at launch.

"Participation [in the trust] is unencumbered and each beneficiary will immediately enjoy dividends, such as the maiden one just paid which will provide much needed additional income for households," said PepsiCo.

Describing the structure of the trust as "novel", PepsiCo SSA CEO, Tertius Carstens said: "Unlike a typical ESOP structured to distribute lump-sum pay-outs after a set vesting period, the Bašumi Trust, uniquely offers our employees the immediate financial benefit of a dividend together with the surety of future milestone distributions."-Fin24/Bloomberg

Twitter adds Elon Musk to its board

Twitter named Elon Musk to its board a day after it was publicly disclosed that the chief executive officer of Tesla had amassed a 9.2% stake in the social-media company.

According to a filing with the Securities and Exchange Commission on Tuesday, Musk will not own more than 14.9% of Twitter during his time on the board and up to 90 days thereafter. Musk’s term on the board is set to expire at Twitter’s 2024 annual meeting. Twitter’s shares jumped 8% in early trading in New York.

Musk purchased his Twitter stake in mid-March, making him the company’s biggest shareholder. He has also been one of the biggest personalities on Twitter and has regularly run into trouble on the platform. Musk is currently seeking to exit a 2018 deal with the SEC that put controls in place related to his tweeting about Tesla.

Twitter CEO Parag Agrawal said in a tweet that he’s "excited" about appointing Musk to the board. "He’s both a passionate believer and intense critic of the service which is exactly what we need on Twitter, and in the boardroom, to make us stronger in the long-term."-Fin24/Bloomberg

Telkom froze an employee's pension

Telkom has succeeded in "freezing" a pension pay-out to a former employee it is suing for over R200 million.

In a civil trial, Telkom alleges Andrew Johannes Jacobs sold information to its competitors. He resigned in October 2012, ahead of an internal disciplinary hearing.

Jacobs applied to the Pretoria High Court to have his pension released. He said his family was suffering financially due to an "inordinate delay" in proceedings against him.

Telkom launched a counter application asking for an interim interdict, preventing the pay out of the pension money until the civil case is concluded.

Judge Ronel Tolmay, in her ruling last week, said on the facts before the court, it was in the interests of justice to grant the interim interdict, in spite of the inordinate delay. -Fin24/Bloomberg

Harith General Partners sells stake

Harith General Partners, which invests in African infrastructure, announced on Tuesday that it has concluded the sale of its stake in the west African communications service operator MainOne for US$320 million (R4.7 billion) on a gross basis.

MainOne is one of the largest investments of the Harith-managed US$630 million Pan-African Infrastructure Development Fund (PAIDF). Harith's stake was bought by Nasdaq-listed Equinix, a digital infrastructure company.

Harith regards the sale of MainOne as an important milestone for the company and the PAIDF investors. Harith CEO Sipho Makhubela told Fin24 on Tuesday evening that the timing was right to sell MainONe.

"It is not a forced sale. Equinix can now take MainONe to the next level, while we can look into other infrastructure investment opportunities," said Makhubela. "We are happy with the value proposition we got from the deal."

In his view, the success of MainOne illustrates Harith's proven ability to identify compelling value opportunities that have the potential to deliver both developmental and financial returns to investors. -Fin24/Bloomberg