CITY OF TSHWANE METROPOLITAN MUNICIPALITY - Provincial Intervention in Terms of Section139 (1)(C) of The Constitution - CTMM

Provincial Intervention in Terms of Section139 (1)(C) of The Constitution - CTMM

THE CITY OF TSHWANE METROPOLITAN MUNICIPALITY
(A municipality as described in section 2 of the Local Government Municipal Systems Act, 2000, duly
established in terms of Notice No. 6770, promulgated in the Provincial Gazette Extraordinary of 1
October 2000 in terms of section 12(1) read with section 14(2) of the Local Government: Municipal
Structures Act, 1998, as amended)
(Issuer code: CTMM)
(“City of Tshwane” or the “Issuer”)

PROVINCIAL INTERVENTION IN TERMS OF SECTION 139(1)(C) OF THE
CONSTITUTION: CITY OF TSHWANE METROPOLITAN MUNICIPALITY

The Issuer wishes to notify all holders of its debt securities (the Noteholders) that there has been an
intervention in terms of section 139(1)(c) of the Constitution of South Africa, 1996 by the Gauteng
Executive Council (the Intervention). The effect of the Intervention is that the municipal council of the
Issuer has been dissolved and an administrator appointed in the place of the municipal council. The
administrator comprises of a team of ten, who will assume legislative and administrative powers of the
municipality, pending the election of a new municipal council within a period of ninety (90) days. The
administrator’s appointment comes to an end once a new municipal council is declared elected.

The Intervention was informed by, amongst others:

    -   The now dissolved Tshwane Municipal Council has consistently not fulfilled its obligations in
        terms of the Constitution, such as failing on numerous occasions to hold properly quorate
        council meetings and the collapsing of such meetings: this resulting in the failure to perform its
        executive obligation to govern.
    -   The Tshwane Municipal Council, as a consequence of the above state of affairs, has been
        rendered dysfunctional and thus materially compromising service delivery to Tshwane
        residents.
    -   The Gauteng Executive Council has accordingly in terms of the Constitution, been obliged to
        take the necessary corrective action, in order to restore the Municipal Council to functionality.


DEBT SECURITIES ISSUED BY THE CITY OF TSHWANE PER THE R5, 5 BILLION
DOMESTIC MEDIUM TERM NOTE PROGRAMME (the Programme)

In terms of Condition 16.1.1.6 of the Note Programme, an event of default shall have occurred and be
continuing if “an order by any court of competent jurisdiction or authority for administration of the Issuer
in terms of section 139 of the Constitution … is made whether provisionally (and not dismissed or
withdrawn within 30 (thirty) Days thereof) or finally, or the Issuer is placed under administration in terms
of section 139 of the Constitution…”

On the basis of the above, the event of default contemplated under Condition 16.1.1.6 of the
Programme has occurred and noteholders can exercise their rights pursuant to Condition 16.1 of the
Programme. The Issuer will today engage Noteholders in this regard.


For further information, please reach out to TSHWANE METROPOLITAN MUNICIPALITY:

Mavela Dlamini: Acting City Manager

Umar Banda: Chief Financial Officer

Tel: 012 358 8101

Email: umarb@tshwane.gov.za



Johannesburg
24 March 2020

Debt Sponsor
Absa Bank Limited (acting through its Corporate and Investment Bank division)

Date: 24-03-2020 01:59:00
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