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MTN - MTN Group Limited - Cautionary Announcement MTN Group Limited (Incorporated in the Republic of South Africa) Registration Number 1994/009584/06 Share code MTN ISIN ZAE000042164 ("MTN" or "the Company") CAUTIONARY ANNOUNCEMENT Shareholders are advised that, whilst no decisions have yet been made to enter into or implement any particular transaction, MTN Group Limited ("MTN") and Bharti Airtel Limited ("Bharti") are currently exploring a potential transaction whereby MTN and its shareholders would acquire, pursuant to a scheme of arrangement, an approximate 36% economic interest in Bharti, of which 25% would be held by MTN with the remainder held directly by MTN shareholders, and Bharti would acquire an approximate 49% shareholding in MTN. Bharti and MTN have agreed to discuss the potential transaction exclusively with one another until 31 July, 2009. The potential transaction between Bharti and MTN would create a leading telecommunication service provider group aligning Bharti`s market leading Indian business with MTN`s market leading African and Middle Eastern operations. The potential transaction would also represent a significant development in South-South cooperation between India and South Africa. The broader strategic objective would be to achieve a full merger of MTN and Bharti, as soon as it is practicable to create a leading emerging market telecom operator which today would have combined revenue of over USD 20 billion and a combined customer base of over 200 million. The discussions contemplate that the potential transaction, which would be achieved through a scheme of arrangement, would include the following principal elements: - MTN would acquire approximately a 25% post-transaction economic interest in Bharti for an effective consideration of approximately USD 2.9 billion in cash and newly issued shares of MTN equal to approximately 25% of the currently issued share capital of MTN - Bharti would acquire approximately 36% of the currently issued share capital of MTN from MTN shareholders for a consideration of ZAR 86.00 in cash and 0.5 newly issued Bharti shares in the form of Global Depository Receipts ("GDRs") for every MTN share acquired which, in combination with MTN shares issued in part settlement of MTN`s acquisition of approximately a 25% post-transaction economic interest in Bharti, would take Bharti`s stake to 49% of the enlarged capital of MTN. Each GDR would be equivalent to one share in Bharti and would be listed on the securities exchange operated by JSE Limited - Bharti would have substantial participatory and governance rights in MTN enabling it to fully consolidate the accounts of MTN - MTN`s economic interest in Bharti would be equity accounted and would have appropriate representation on the Bharti Board The potential transaction, when completed, would be expected to create value for MTN shareholders due to, among others, synergistic benefits and a further diversification of MTN`s income streams into the fast growing and relatively under penetrated Indian market. The potential transaction is also expected to create value for Bharti shareholders, including going forward MTN and MTN shareholders, due to, among others, synergistic benefits and further diversification of Bharti income streams into the fast growing and relatively under-penetrated African and Middle Eastern markets. MTN would continue to be listed on the securities exchange operated by JSE Limited and would be the primary vehicle for both Bharti and MTN to pursue further expansion across Africa and the Middle East while Bharti would be the primary vehicle for both Bharti and MTN to pursue further expansion in India and Asia. The implementation of the potential transaction would not result in any job losses in South Africa. MTN remains fully committed to implementing MTN`s proposed BEE deal, as set out in its announcements on SENS on 15 December 2008, 18 February 2009 and 27 March 2009. MTN would also have certain rights to increase its economic interest in Bharti in the future. The discussions, which may have a material effect on the price of MTN`s securities if successfully concluded, are at an early stage and may or may not lead to any transaction. Shareholders are further expressly cautioned that the structure and terms of the potential transaction may be adjusted to reflect, among others, further discussions between the parties and discussions with lending banks and applicable regulators. No decision or agreement to acquire any shares or implement the potential transaction outlined above has yet been made by the Boards of either MTN or Bharti. Accordingly, shareholders are advised to exercise caution when dealing in the Company`s securities until a further announcement is made. Fairland 25 May 2009 Financial Advisors Bank of America Merrill Lynch Deutsche Bank AG Sponsor Deutsche Securities SA (Pty) Limited Legal Advisors Freshfields Bruckhaus Deringer LLP Webber Wentzel Date: 25/05/2009 07:05:11 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
