MultiChoice has announced that shareholders of its Phuthuma Nathi black economic empowerment investment vehicle have approved the restructuring plan associated with the Canal+ acquisition.
Recently, the Competition Tribunal gave the green light to the US$3.1 billion deal, contingent on several agreed-upon conditions, including the reorganisation of MultiChoice South Africa Holdings (MCSAH).
The transaction encountered two significant hurdles that required a strategic restructuring of the MultiChoice framework to meet local regulatory demands.
The Electronic Communications Act limits foreign shareholders to 20% of the voting rights for broadcasting licensees. Secondly, the Independent Communications Authority of South Africa (Icasa) mandates that licensees must have at least 30% ownership by individuals from historically disadvantaged groups, encompassing black individuals, women, and those with disabilities.
To adhere to these local regulations, MultiChoice (Pty) Ltd will establish a separate entity, Licenceco, to hold the South African operating licenses.
As part of the restructuring, MultiChoice Group will reduce its ownership stake in LicenceCo, which holds the broadcasting license in South Africa, to a 49% economic interest and 20% voting rights through transactions involving four entities.
Effective on or around August 1, 2025, MultiChoice will enter into various subscription, repurchase, and shareholder agreements with Phuthuma Nathi, 13th Avenue Investments, the Identity Partners Itai Consortium (IPIC), and the MultiChoice Workers Trust.
The Workers Trust is a broad-based ownership scheme designed to benefit LicenceCo employees and key suppliers.
13th Avenue Investments comprises various investment vehicles associated with notable figures, including Sipho Maseko, Neo Lesela, Khanyisile Kweyama, and Philisiwe Sibiya. Maseko is the former CEO of Telkom.
IPIC is backed by investment entities affiliated with Sonja de Bruyn, Maxell Nyanteh, Talaleni Moshapo, Ernest Kwinda, and Eugene Govender.
MultiChoice has emphasised that these individuals bring extensive commercial and industry expertise.
The four entities will receive a combination of ordinary and notional shares, which the vendors will fund. The shares will initially have restricted rights but will gradually convert to full shares as the financial obligations are fulfilled.
Phuthuma Nathi will secure its stake in LicenceCo through a US$213 million loan claim from MultiChoice, while 13th Avenue and IPIC will collectively invest US$16 million in their shares.
Additionally, Phuthuma Nathi holds a 25% interest in Orbicom, MultiChoice South Africa’s signal distribution unit. A 20% direct investment in Orbicom will expand this interest to a 40% stake.
The transactions involving LicenceCo and Orbicom will result in MultiChoice divesting 26% of its economic interest in LicenceCo and 15% of its interest in Orbicom.
MultiChoice confirmed that the reorganisation does not require shareholder approval, categorising it as a Category 2 transaction in accordance with JSE regulations.
MultiChoice and Phuthuma Nathi shareholders will receive an extraordinary dividend of US$77 million, with US$19 million allocated to Phuthuma Nathi.
MultiChoice states, “The payment of this extraordinary dividend is subject to the implementation of the steps in the Reorganisation that precede the dividend payout.”
