In a shareholder notice dated Monday, August 4, MultiChoice said it would reduce its interest in LicenceCo, the company holding its South African broadcasting licence, to 49% economic interest and 20% voting rights. The step is meant to align with the Electronic Communications Act, which caps foreign voting rights in licensees at 20%, and with Icasa’s requirement for 30% ownership by historically disadvantaged individuals (HDIs).
To meet these requirements, MultiChoice has entered into transactions with four entities, Phuthuma Nathi, 13th Avenue Investments, Identity Partners Itai Consortium (IPIC), and the MultiChoice Workers Trust. Agreements include share subscriptions and repurchase deals signed on or around August 1.
Phuthuma Nathi, the company’s longstanding BEE investment arm, will acquire its shareholding through a loan claim of R3.77 billion (approx. $226 million). It will also raise its indirect interest in Orbicom, MultiChoice’s signal distribution unit, from 25% to 40%, with a new 20% direct stake included.
13th Avenue Investments, linked to investors such as former Telkom CEO Sipho Maseko, and IPIC, backed by figures including Sonja de Bruyn and Ernest Kwinda, will pay a combined R287 million (approx. $17.2 million) for their shares. MultiChoice described the investors involved as experienced and commercially astute.
The new shareholders will receive a mix of ordinary and notional vendor-funded shares, initially carrying limited rights. These will convert to full shares as funding obligations decline.
The restructuring qualifies as a Category 2 transaction under JSE rules and therefore does not require a vote by MultiChoice shareholders.
In parallel, MultiChoice and Phuthuma Nathi shareholders are set to receive an extraordinary dividend of R1.375 billion (approx. $82.5 million), with R343.75 million (approx. $20.6 million) going to Phuthuma Nathi.
“The payment of this extraordinary dividend is subject to the implementation of the steps in the Reorganisation which preceded the payment of this dividend,” MultiChoice stated.
Meanwhile, in Ghana, the company is under scrutiny from the National Communications Authority (NCA), which has ordered DStv to reduce its prices or face a suspension of its licence. The deadline for compliance is August 7.
