MTN ZAKHELE (RF) LIMITED - Fulfilment of New Empowerment Transaction conditions - MTNZBE

Release Date: 22/11/2016 13:23
Code(s): MTNZBE
 
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Fulfilment of New Empowerment Transaction conditions - MTNZBE

MTN Zakhele (RF) Limited

(Incorporated in South Africa)

(Registration number 2010/004693/06)

Share code: MTNZBE ISIN: ZAE000208526

(“MTN Zakhele” or “MTNZ” or the “Company”)

FULFILMENT OF CONDITIONS IN RELATION TO THE NEW EMPOWERMENT TRANSACTION


If you have any queries regarding the contents of this announcement and/or the unwinding of MTN
Zakhele please contact the MTNZ Shareholder Call Centre (083 123 6869) or visit the MTN Zakhele
website www.mtnz.co.za.

Unless defined in this announcement or if the context dictates otherwise, capitalised terms used in
this announcement have the same meanings as given in the announcement dated 22 August 2016
detailing the terms of the unwinding of MTN Zakhele (“Announcement”).

1.    INTRODUCTION

1.1         MTNZ Shareholders are referred to the announcements released by the Company on
            the SENS on 22 August 2016, 12 October 2016 and 17 October 2016 in relation to the
            unwinding of MTN Zakhele in November 2016.

1.2         MTNZ Shareholders are hereby advised that all of the conditions in relation to the New
            Empowerment Transaction have been fulfilled (or deemed fulfilled) or waived.

1.3         As detailed in the Announcement, the Scheme is subject to the fulfilment or waiver of
            the condition that no Enforcement Action is taken by the MTNZ Pref Share holders at or
            prior to the redemption, in full, of the MTNZ Pref Shares in accordance with the
            Implementation Agreement. This is the last remaining condition to which the Scheme is
            subject.

1.4         As a result of the fulfilment or waiver of the conditions set out in paragraph 1.2 above
            and in the absence of any Enforcement Action being taken at or prior to redemption of
            the MTNZ Pref Shares on 24 November 2016, MTN Zakhele will proceed with the MTNZ
            Integrated Unwinding with a resultant Operative Date of Thursday, 24 November 2016.

1.5         MTNZ Shareholders are referred to the announcement published by MTN on 22
            November 2016 simultaneously with this announcement.

2.    RESULTS OF THE ELECTION PROCESS

2.1         In consideration for the repurchase (and cancellation) of their MTNZ Shares, MTNZ
            Shareholders elected (or are deemed to have elected) to receive one or a combination
            of the following Scheme Considerations based on their respective pro rata entitlement
            to the MTNZ Net Assets:

                    2.1.1     MTNZ Shareholders holding 28 326 490 MTNZ Shares elected to receive
                              MTN Consideration Shares;

                    2.1.2     MTNZ Shareholders holding 39 082 386 MTNZ Shares elected to receive
                              the Cash Consideration; and

                    2.1.3     MTNZ Shareholders holding 13 479 330 MTNZ Shares elected to receive
                              MTNZ Futhi Consideration Shares.

2.2        Due to the subscription under the MTNZ Futhi Public Offer and the MTNZ Re-
           investment Offer being less than the Target Equity Raise, no Scaling Principles were
           applied. Therefore, qualifying MTNZ Shareholders that validly elected to receive MTNZ
           Futhi Consideration Shares will receive their full election, subject to rounding.

2.3        MTNZ Shareholders that validly elected MTNZ Futhi Consideration Shares will receive a
           welcome pack containing, inter alia, a welcome letter, confirmation of share issuance, a
           token share certificate and important MTN Zakhele Futhi shareholder information
           which will be sent to all successful applicants on or before 23 December 2016.

3.    CALCULATION OF MTNZ NET ASSETS IN THE MTNZ INTEGRATED UNWINDING

3.1        Set out below is the final calculation of the MTNZ Net Assets in the MTNZ Integrated
           Unwinding:

                                                                 Number of MTN Shares            Value

                                                                                             (R’million)

                                                                                                      1
            MTN Shares held by MTNZ                                        75 363 138          8 489.7

                                                                                     3                2
            MTNZ Specific Repurchase                                     (23 479 083)        (2 644.9)

                                                                                                      1
            MTNZ Specific Repurchase to settle the notional                (5 882 100)         (662.6)
            vendor finance

                                                                                                      4
            MTN Shares disposed of to settle MTNZ taxes and                (2 469 191)         (305.5)
            costs

            Net MTN Shares available for distribution after                43 532 764           4 876.7
            settlement of the third party preference share
            funding, notional vendor finance, taxes, costs and
            provisions

            MTN Shares available for distribution per MTNZ                    0.53818           R60.29
            Share

           Notes:

           1.   Based on the 30 day volume weighted average price per MTN Share to 18 November 2016
                of R112.65010 multiplied by the number of MTN Shares.

           2.   Comprising the MTNZ Pref Shares redemption amount, net of cash (R2 610.8 million), a
                general provisions amount (R21 million) and a provision for Securities Transfer Tax on
                redemption of the preference shares (R13.13 million).

           3.   The number of MTN Shares to be repurchased by MTN from MTN Zakhele in terms of the
                MTNZ Specific Repurchase has been calculated by dividing the amount in note 2 above by
                the 30 day volume weighted average price per MTN Share to 18 November 2016 of
                R112.65010.

           4.   To the extent that there is any residual cash from the sale of the Tax Provision MTN Shares
                (that is, cash in excess of the amount required to pay or provide for the MTNZ Taxes), Wind-
                up Co will pay that amount of cash for and on behalf of MTNZ as additional Scheme
                Consideration to all Scheme Participants pro rata to their holdings of MTNZ Shares (being
                the “MTNZ Tax Cash Top-Up Amount”). The MTNZ Tax Cash Top-Up Amount (if applicable)
                will be published on SENS on Friday, 9 December 2016.

           5.   The repurchase by MTNZ on the applicable Operative Date of that number of MTNZ Shares
                in respect of which Scheme Participants elect (or are deemed to have elected) to receive
                MTN Consideration Shares and/or Cash Consideration, will result in a change in beneficial
                ownership, and therefore a transfer, of the corresponding Base Entitlement Shares to the
                Scheme Participants. Securities Transfer Tax will therefore be recoverable from each
                Scheme Participant in respect of the Base Entitlement Shares transferred to it.

           6.   No Securities Transfer Tax will be incurred in respect of the MTNZ Futhi Consideration
                Shares transferred to a Scheme Participant.

           7.   South African Scheme Participants are referred to paragraph 19 of the MTNZ Scheme
                Circular for a general summary of the income tax, CGT and STT implications of the Scheme
                for Scheme Participants.

4.    REMAINING SALIENT DATES AND TIMES

4.1        Set out below are the remaining salient dates and times pertaining to the
           implementation of the MTNZ Integrated Unwinding:

                                                                                                  2016
      Operative Date of the Scheme on or about                                   Thursday, 24 November
      Certificates for the MTN Consideration Shares posted to                    Thursday, 24 November
      certificated MTNZ Shareholders and/or MTNZ Futhi
      Consideration Shares credited to the account opened with
      Nedbank Limited (acting through its Share Scheme
      Administration division) on or about
      Dematerialised MTNZ Shareholders expected to have their                    Thursday, 24 November
      accounts (held at the Custody Entity, or their CSDP, broker or
      nominee) credited with the MTN Consideration Shares and/or
      MTNZ Futhi Consideration Shares credited to the account
      opened with Nedbank Limited (acting through its Share Scheme
      Administration division) on or about
      Earliest date on which MTNZ may commence a market sale                       Friday, 25 November
      process to settle the Cash Consideration component of the
      Scheme Consideration on or about
      Certificated MTNZ Shareholders expected to have the Cash                     Monday, 12 December
      Consideration (and any rounding cash amount and the MTNZ Tax
      Cash Top-Up Amount, if applicable) paid into their nominated
      bank accounts on or about
      Dematerialised MTNZ Shareholders expected to have their                      Monday, 12 December
      accounts (held at the Custody Entity, or their CSDP, broker or
      nominee) credited with the Cash Consideration (and any
      rounding cash amount and MTNZ Tax Cash Top-Up Amount, if
      applicable) on or about
      Dematerialised MTNZ Shareholders whose accounts are held                    Tuesday, 13 December
      with the Custody Entity will have their bank accounts credited
      with the Cash Consideration (and any rounding cash amount and
      MTNZ Tax Cash Top-Up Amount, if applicable) on or about
      Termination of listing of MTNZ Shares at the commencement of               Wednesday,14 December
      trading on or about                                     

      The remaining salient dates and times are subject to change.

By order of the Board of Directors of MTN Zakhele (RF) Limited

22 November 2016



Corporate advisor to MTN Zakhele

Tamela

Legal and tax advisor to MTN Zakhele, MTN and MTN Zakhele Futhi

Webber Wentzel

Transaction sponsor to MTN Zakhele

Nedbank Corporate and Investment Banking

Investment bank, corporate advisor and transaction sponsor to MTN

Nedbank Corporate and Investment Banking

Investment bank, corporate advisor, arranger and bookrunner to MTN Zakhele Futhi

Nedbank Corporate and Investment Banking

Independent legal advisors to MTN Zakhele and MTN Zakhele Futhi

Prinsloo, Tindle & Andropoulos

Beja Incorporated

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