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MTN Group Limited - Announcement To MTN Shareholders
Newshelf 664 (Proprietary) Limited
("Newshelf")
MTN Group Limited
("MTN")
Registration number 1994/009584/06
Share code: MTN
ISIN: ZAE000042164
ANNOUNCEMENT TO MTN SHAREHOLDERS
Early redemption of certain Newshelf funding instruments
Further to the Newshelf announcement made on 20 December 2002, shareholders of
MTN are advised that Newshelf has on 31 March 2005 concluded an agreement (the
"early redemption agreement") with, inter alia, Transnet Limited ("Transnet")
and the Public Investment Commissioners (the "PIC") for the purpose of redeeming
early certain of the funding instruments which were issued by Newshelf between
December 2002 and March 2003 to raise the funding to acquire 309 million MTN
shares (18.7% of the issued share capital of MTN at the time).
Newshelf is wholly owned by The Alpine Trust, whose beneficiaries are the
management and staff of MTN, including the executive directors. It remains the
intention of The Alpine Trust to preserve the Newshelf structure pursuant to the
early redemption for the long-term benefit of its beneficiaries and MTN, as
contemplated by The Alpine Trust Deed.
The early redemption agreement, entered into pursuant to a request from certain
of Newshelf"s funders will, after implementation, enable the funders and
Newshelf to reduce the risk in the existing funding structure, thereby leaving
Newshelf with an unencumbered holding in MTN for the benefit of The Alpine
Trust"s beneficiaries.
The early redemption agreement is conditional upon the fulfilment of various
suspensive conditions including, inter alia, the obtaining of the requisite
approvals by Transnet and the PIC and the settlement or refinancing of the
Newshelf variable rate redeemable preference shares held by private sector banks
(the "A preference shares").
The salient terms of the early redemption are as follows:
* Newshelf will distribute 118,652,167 MTN shares to the PIC in full settlement
of the Newshelf fixed rate redeemable preference shares (the "B preference
shares") and the participating redeemable preference share (the "B participating
preference share") issued to the PIC; and
* Newshelf will sell 75,242,411 MTN shares to the PIC to raise the funds to
fully redeem the Newshelf participating redeemable preference share held by a
wholly-owned subsidiary of Newshelf in which all economic benefits currently
vest in Transnet, Newshelf 697 (Proprietary) Limited ("Subco") (such share
hereinafter referred to as the "C participating preference share"). It is the
intention that the C participating preference share redemption proceeds will be
utilised by Transnet to redeem the promissory notes issued by Subco, which notes
carry a Transnet and National Treasury guarantee.
The PIC has confirmed its intention to remain a long term investor in MTN.
Newshelf will retain 115,105,422 MTN shares, equal to 6.9% of the aggregate
issued share capital of MTN, prior to:
* the sale of MTN shares, if any, for the settlement by Newshelf of the
resultant costs and taxes, including Secondary Tax on Companies, of the early
redemption; and
* the redemption of the A preference shares, if applicable.
It is not envisaged that the early redemption will result in the disposal by
Newshelf of any MTN shares other than those distributed or sold for the purpose
of redeeming the preference shares and settling the resultant costs and taxes. A
portion of the voting rights and economic value attaching to the retained shares
remains unavailable to Newshelf as a result of an existing hedging arrangement.
Newshelf"s eventual beneficial interest in MTN shares, pursuant to settlement of
the abovementioned items, will, accordingly, be significantly lower but will,
however, remain a significant unencumbered interest held by a strategic BEE
investor in MTN, particularly in view of MTN"s significant non-South African
operations.
Directors" dealing in Newshelf preference shares
Further to the MTN announcements made on 11 April 2003 and 26 September 2003
regarding the exercise by the executive directors of MTN at the time of an
option to acquire 0.23% of the economic interests of the B preference shares and
0.23% of the economic interests of the B participating preference share for a
total consideration of R5 million, shareholders of MTN are advised that, in
terms of the early redemption agreement, the executive directors will dispose of
their economic interests in the B preference shares and the B participating
preference share back to the PIC for a consideration to be paid in the form of
276,837 MTN shares. The MTN shares will be distributed to the executive
directors pro rata to their acquisition considerations, as follows:
PF Nhleko 89,283
RD Nisbet 62,518
RS Dabengwa 62,518
I Charnley 62,518
Total 276,837
Johannesburg
6 April 2005
Investment bank to Newshelf
Nedbank Capital
Corporate law adviser to Newshelf
Edward Nathan (Proprietary) Limited
Advisers to Transnet and the PIC
Africa Vukani Investment Management Services
Cadiz Corporate Solutions
Pan-African Advisory Services
Legal adviser to Transnet and the PIC
Sonnenberg Hoffmann Galombik
Sponsor to MTN
Merrill Lynch South Africa (Proprietary) Limited
Date: 06/04/2005 08:00:04 AM Supplied by www.sharenet.co.za
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