MTN ZAKHELE (RF) LIMITED - Detailed terms announcement regarding the unwinding of MTN Zakhele in November 2016 Withdrawal of cautionary -MTNZBE

Release Date: 22/08/2016 08:00
Code(s): MTNZBE
 
Wrap Text
Detailed terms announcement regarding the unwinding of MTN Zakhele in November 2016
Withdrawal of cautionary -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”)

DETAILED TERMS ANNOUNCEMENT REGARDING THE UNWINDING OF MTN ZAKHELE IN NOVEMBER
2016

WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

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.

1.      BACKGROUND AND INTRODUCTION

1.1         In 2010, MTN Group Limited (“MTN”) implemented a black economic empowerment
            (“BEE”) transaction (“Existing Empowerment Transaction”) in terms of which (i) MTNZ
            issued MTNZ ordinary shares (“MTNZ Shares”) to qualifying members of the black public;
            and (ii) MTNZ acquired and/or subscribed for MTN ordinary shares (“MTN Shares”) equal
            to approximately 4% of the then issued share capital of MTN (using a combination of
            equity funding, vendor facilitation through a donation from MTN, notional vendor finance
            (“NVF”) from MTN and third-party preference share funding (through the issue of the
            MTNZ preference shares (“MTNZ Pref Shares”))).

1.2         MTNZ Shares were listed on the BEE segment of the JSE Limited (“JSE”) (as asset-backed
            securities) in November 2015.

1.3         The Existing Empowerment Transaction was established as a 6-year scheme, with the
            requirement for MTNZ ordinary shareholders (“MTNZ Shareholders”) to be (and remain)
            qualifying black persons and groups until, and for MTNZ’s third party funding to mature
            on, 24 November 2016 (or possibly later), being the 6th anniversary of the start of the
            scheme. On that date, the MTNZ Pref Shares will become compulsorily redeemable in
            accordance with the MTNZ memorandum of incorporation. MTNZ is also obliged
            immediately thereafter to settle the NVF provided to it by MTN.

1.4         MTN intends to implement a new BEE transaction (“New Empowerment Transaction”),
            through a newly established special purpose company - MTN Zakhele Futhi (RF) Limited
            (“MTNZ Futhi”) - by means of the following core elements:

1.4.1              a public offering in terms of which black participants will be invited to subscribe for
                   and beneficially own MTNZ Futhi ordinary shares (“MTNZ Futhi Shares”) (“MTNZ
                   Futhi Public Offer”);

1.4.2              the “MTNZ Re-investment Offer”, in terms of which MTNZ Shareholders will be
                   offered an election to receive a portion of their investment in MTNZ Shares in
                   MTNZ Futhi Shares. The MTNZ Re-investment Offer is being facilitated by MTN
             
             through a repurchase by MTN of a sufficient number of MTN Shares from MTN
             Zakhele at the 30 day volume weighted average price (“VWAP”) per MTN Share
             immediately preceding 18 November 2016 (“Repurchase Share Price”) (“MTNZ
             Specific Repurchase”). In addition to facilitating the MTNZ Re-investment Offer,
             the purpose of the MTNZ Specific Repurchase is for MTNZ to, amongst others,
             realise sufficient cash to fully redeem the MTNZ Pref Shares, pay or provide for
             taxes and provide for unwinding costs and contingencies;

1.4.3        MTNZ Futhi raising third party finance (through the issue of preference shares);

1.4.4        MTN providing MTNZ Futhi with funding and vendor facilitation through, among
             others, the notional vendor funding and (potentially) a subordinated loan(s) from
             MTN; and

1.4.5        the subscription by MTNZ Futhi for MTN Shares equal to approximately 4% of the
             issued share capital of MTN, at an aggregate 20% discount to the 10 day VWAP per
             MTN Share immediately preceding 18 August 2016 (being R128.50 per MTN Share)
             (“Transaction Share Price”), which after the 20% discount equates to R102.80 per
             MTN Share.

1.5     At the same time, it is envisaged that the board of directors of MTN Zakhele (“MTNZ
        Board”) will propose, in terms of section 114 of the Companies Act, 2008 (Act No. 71 of
        2008), as amended (“Companies Act”) a scheme of arrangement (“MTNZ Unwinding
        Scheme” or “Scheme”) between MTNZ and the MTNZ Shareholders in terms of which
        MTNZ will repurchase (and cancel) all the MTNZ Shares (other than the single MTNZ Share
        to be acquired and held by Mobile Telephone Networks Holdings Limited (“MTN
        Holdings”), which will not participate in the Scheme).

1.6     On 21 August 2016, MTN, MTNZ and various other parties entered into an agreement
        entitled “New Empowerment Transaction and MTN Zakhele Unwinding Implementation
        Agreement” which provides for the implementation of the New Empowerment
        Transaction and the unwinding of MTN Zakhele (“Implementation Agreement”).

1.7     In the event that the New Empowerment Transaction is implemented in accordance with
        the Implementation Agreement, MTNZ’s unwinding will be indivisibly linked to the New
        Empowerment Transaction and MTNZ will unwind on a structured basis in accordance
        with the terms of (and in the sequence provided for under Part A of) the Implementation
        Agreement and the Scheme (“MTNZ Integrated Unwinding”). In the event, however, that
        the New Empowerment Transaction conditions precedent are not fulfilled or if the New
        Empowerment Transaction does not proceed for whatsoever reason, MTNZ will unwind
        on a ‘standalone’ basis in accordance with the terms of (and in the sequence provided
        for under Part B of) the Implementation Agreement and the Scheme (“MTNZ Standalone
        Unwinding”).

1.8     In consideration for the repurchase (and cancellation) of their MTNZ Shares, MTNZ
        Shareholders can elect to receive one or a combination of the following considerations
        (“Scheme Consideration” or “Options”) based on their respective pro rata entitlement
        to the MTNZ net assets, being effectively such number of MTN Shares remaining in MTNZ
        after taking into account and/or providing for the liabilities, costs, provisions and
        associated taxes of and related to the unwinding Scheme (“MTNZ Net Assets”):

1.8.1              a variable number MTN Shares (“MTN Consideration Shares”); and/or

1.8.2              a cash consideration equal to the market price of the MTN Consideration Shares
                   (“Cash Consideration”); and/or

1.8.3              subject to the New Empowerment Transaction being implemented, MTNZ Futhi
                   Shares in terms of the MTNZ Re-investment Offer (“MTNZ Futhi Consideration
                   Shares”).

1.9          Following the implementation of the Scheme (whether as part of the implementation of
             the New Empowerment Transaction (i.e. as the MTNZ Integrated Unwinding) or on the
             basis of the MTNZ Standalone Unwinding), MTNZ will become a wholly-owned subsidiary
             of MTN Holdings and the listing of MTNZ on the JSE will be terminated.

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

2.      ELECTIONS OF SCHEME CONSIDERATION

2.1          All elections (including “Fall-Back Elections” in the case of the election of MTNZ Futhi
             Consideration Shares – see paragraph 2.5 below) must be made in sufficient time but by
             no later than:

             -     in the case of MTNZ Futhi Consideration Shares – 12:00 on the MTNZ Re-
                   investment Offer Record Date (expected to be on Friday, 21 October, 2016); and

             -     in the case of MTN Consideration Shares and/or Cash Consideration – 12:00 on the
                   Scheme Consideration Record Date (expected to be on or about Friday, 18
                   November 2016).

2.2          MTNZ Shareholders who hold their MTNZ Shares through the "Custody Entity" (being
             Link Investor Services Proprietary Limited, acting through its nominee and wholly-owned
             subsidiary, Pacific Custodians (Nominees) (RF) Proprietary Limited), may make their
             elections through the MTNZ website (www.mtnz.co.za) or by contacting the MTNZ
             Shareholder Call Centre (083 123 6869) and must make their election of:

             -     MTNZ Futhi Consideration Shares by no later 12:00 on Wednesday, 19 October
                   2016; and

             -     MTN Consideration Shares and/or Cash Consideration by no later 12:00 on
                   Wednesday, 16 November 2016.

2.3          It is a term of the Scheme that if MTNZ Shareholders:

             -     do not elect one or a combination of the above Scheme Considerations by 12:00
                   on the Scheme Consideration Record Date (which election, for MTNZ Shareholders
                   who hold their MTNZ Shares through the Custody Entity, must be made by no later
                   than 12:00 on Wednesday, 16 November 2016 through the MTNZ trading
                   platform); or

             -     hold less than 50 MTNZ Shares on the Scheme Consideration Record Date,

             such MTNZ Shareholders will be deemed to have elected to receive the Cash
             Consideration in respect of 100% of their MTNZ Shares (or such portion of their MTNZ
             Shares in respect of which no election was received, as the case may be).

2.4        Once an MTNZ Shareholder has made an election of MTNZ Futhi Consideration Shares (i)
           that election will be irrevocable, final and binding and cannot be subsequently withdrawn
           or varied; and (ii) (only) such number of an MTNZ Shareholder’s MTNZ Shares (in respect
           of which MTNZ Futhi Consideration Shares have been elected) will effectively be blocked
           from further trading.

2.5        Due to the potential application of principles and procedures which will govern the final
           allocations of MTNZ Futhi Consideration Shares (“Scaling Principles”), which principles
           may result in MTNZ Shareholders who elected MTNZ Futhi Consideration Shares receiving
           less MTNZ Futhi Consideration Shares than they have elected, all MTNZ Shareholders are
           encouraged to elect an alternative Scheme Consideration (“Fall-Back Election”) of either
           the MTN Consideration Shares or Cash Consideration, or a combination thereof. Such
           elections should also be made by no later than 12:00 on the Scheme Consideration
           Record Date (or by no later than 12:00 on Wednesday, 16 November 2016, for MTNZ
           Shareholders who hold their MTNZ Shares through the Custody Entity). In the absence of
           such an election, MTNZ Shareholders will be deemed to have elected to receive the Cash
           Consideration in respect of the entire portion of their MTNZ Shares for which MTNZ Futhi
           Consideration Shares were not allocated.

2.6        In order to be eligible to receive:

           -     MTN Consideration Shares, MTNZ Shareholders must elect to receive MTN
                 Consideration Shares in respect of at least 200 of their MTNZ Shares (in aggregate)
                 – whether as their primary election or as (or when combined with) their Fall-Back
                 Election; and

           -     MTNZ Futhi Consideration Shares, MTNZ Shareholders must elect to receive MTNZ
                 Futhi Consideration Shares in respect of at least 50 of their MTNZ Shares;

2.7        MTNZ Shareholders who elect to receive MTNZ Futhi Consideration Shares must also, in
           addition to making their election, complete the application process described in the
           MTNZ Futhi prospectus (“Prospectus”) and deliver the necessary information and
           supporting documents to a participating Nedbank branch by no later than 16:00 on
           Friday, 21 October 2016. Such shareholders will also be required to be verified for FICA
           (Financial Intelligence Centre Act, 2001 (No. 38 of 2001)) purposes by a participating
           Nedbank branch by no later than 16:00 on Friday, 21 October 2016.

2.8        If the New Empowerment Transaction is not implemented, MTNZ Shareholders will not
           be eligible to receive MTNZ Futhi Consideration Shares. In that instance, MTNZ
           Shareholders would receive MTN Consideration Shares and/or Cash Consideration (in
           such proportions as they may have elected as part of their Fall-Back Elections).

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

3.1        Set out below is an indicative calculation of the MTNZ Net Assets in the MTNZ Integrated
           Unwinding:
                                                               Number of MTN                 Value
                                                                      Shares
                                                                                        (R’million)
            MTN Shares held by MTNZ                               75 363 138              10 037.7 1
            MTNZ Specific Repurchase                             (20 532 164)3            (2 734.7)2
            MTNZ Specific Repurchase to settle the                (4 802 890)               (639.7)1
            notional vendor finance
            MTN Shares disposed of to settle MTNZ                 (4 004 923)               (554.7)4
            taxes and costs
            Net MTN Shares available for                          46 023 161               6 108.6
            distribution after settlement of the third
            party preference share funding, notional
            vendor finance, taxes, costs and
            provisions
            MTN Shares available for distribution per                0.56897                R75.52
            MTNZ Share

          Notes:

          1. Based on the 30 day volume weighted average price per MTN Share to 17 August
             2016 of R133.19 multiplied by the number of MTN Shares.

          2. Comprising the estimated MTNZ Pref Shares redemption amount, net of cash
             (R2 650.44 million), a general provisions amount (R21 million), MTN Zakhele’s
             proportionate share of the A Indemnified Amount (R50 million) (see paragraph 8.1.7
             below) and a provision for Securities Transfer Tax on redemption of the preference
             shares (R13.27 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 17 August
             2016 of R133.19.

          4. The MTNZ taxes amount is an indicative figure.

4.    RATIONALE FOR MTNZ SHAREHOLDERS TO VOTE IN FAVOUR OF THE SCHEME AT THE
      SHAREHOLDERS' MEETING

4.1       The Scheme is designed to provide flexibility to MTNZ Shareholders to realise in cash the
          full value of their shareholding in MTNZ and/or continue to retain exposure to MTN's
          future growth prospects through their holding of MTN Shares and/or participation in the
          New Empowerment Transaction.

4.2       Furthermore, unlike public applicants under the MTNZ Futhi Public Offer, MTNZ
          Shareholders that validly elect to reinvest in the New Empowerment Transaction, will be
          allocated at least a portion of the MTNZ Futhi Shares which they elect to receive, subject
          to certain Scaling Principles.

5.    CONSEQUENCES IF THE SCHEME IS NOT APPROVED OR IS OTHERWISE NOT IMPLEMENTED

5.1        If MTNZ Shareholders do not approve the Scheme, or if the Scheme does not become
           operative for any other reason, then neither the MTNZ Integrated Unwinding nor the
           MTNZ Standalone Unwinding will proceed. MTNZ Shareholders will continue to hold their
           MTNZ Shares and will not receive a distribution of the MTNZ Net Assets (that is, none of
           the Scheme Consideration options) as contemplated under the Scheme.

5.2        If the Scheme is not implemented, the MTNZ Shares are expected to remain listed (as
           asset-backed securities) on the JSE, although the trading restrictions which currently
           apply to the MTNZ Shares will lapse on 24 November 2016 when the MTNZ Shares
           become freely tradable with other members of the broader public.

5.3        In addition, MTNZ's assets will be reduced following the repayment of its funding such
           that MTNZ will no longer hold approximately 4% of MTN's issued share capital but will be
           debt free.

6.    MTNZ FUTHI OFFER AND THE PROSPECTUS

6.1        The offers of MTNZ Futhi Shares to both the black public under the MTNZ Futhi Public
           Offer and to MTNZ Shareholders under the Scheme have been combined in the
           Prospectus, a copy of which will accompany the circular to MTNZ Shareholders (“MTNZ
           Scheme Circular”). Unlike applicants under MTNZ Futhi Public Offer, MTNZ Shareholders
           who make an election to so receive the MTNZ Futhi Consideration Shares will not be
           required to pay for the MTNZ Futhi Consideration Shares, but to exchange the relevant
           proportion of their MTNZ Shares for the applicable proportion of the MTNZ Futhi
           Consideration Shares.

6.2        MTNZ Futhi Shares will not be listed on a recognised stock exchange when they are issued
           and may only become listed on a recognised stock exchange on or after the third
           anniversary of the issue date. The New Empowerment Transaction is an 8-year scheme,
           during which period various trading restrictions and obligations are imposed on MTNZ
           Futhi Shareholders by the Relationship Agreement (being the agreement between MTN
           and MTNZ Futhi and to which MTNZ Futhi Shareholders are bound pursuant to the MTNZ
           Futhi Public Offer and MTNZ Re-investment Offer regulating the rights and obligations of
           these parties relating to the holding of MTN Shares by MTNZ Futhi and the holding of
           MTNZ Futhi Shares by the MTNZ Futhi Shareholders).

6.3        In addition to being distributed with the MTNZ Scheme Circular, copies of the Prospectus
           will be made available at participating Nedbank branches and MTN stores around South
           Africa to members of the black public who wish to participate in the MTNZ Futhi Public
           Offer.

7.    REPORT OF THE INDEPENDENT EXPERT AND THE MTNZ BOARD’S RECOMMENDATION AND
      RESPONSIBILITY STATEMENT

7.1        QuestCo Proprietary Limited and Basis Points Capital Proprietary Limited, acting as joint
           independent expert to the MTNZ Board (“Independent Expert”), have been appointed to
           provide external advice to the MTNZ Board in terms of section 114 of the Companies Act.
           A copy of the Independent Expert’s Report will be included in the MTNZ Scheme Circular.

7.2        The MTNZ Board will consider the terms and conditions of the Scheme and, taking into
           account the opinion of the Independent Expert, will provide its opinion, and provide its
          recommendations as to whether or not MTNZ Shareholders should vote in favour of the
          resolutions to approve the MTNZ Unwinding Scheme in the MTNZ Scheme Circular.

7.3       The MTNZ Board accepts responsibility for the information contained in this
          announcement, confirms that to the best of their respective knowledge and belief, the
          information contained in this announcement is true and the announcement does not
          omit anything likely to affect the importance of the information.

8.    SCHEME CONDITIONS PRECEDENT

8.1       The implementation of the Scheme is subject to the fulfilment (or deemed fulfilment) or
          waiver of, inter alia, the following summarised conditions on or before 17:00 on
          Thursday, 17 November 2016, (or such later date and/or time as may be agreed in writing
          between MTN and MTNZ) ("Fulfilment Date and Time"):

                8.1.1     all regulatory approvals and consents necessary in respect of the Scheme
                          being obtained, including, but not limited to approvals and consents
                          from the JSE and the Takeover Regulation Panel;

                8.1.2     the special resolution to approve the Scheme (including the disposal by
                          MTNZ of all or the greater part of its assets or undertaking for purposes
                          of section 112 of the Companies Act and for all other purposes) being
                          adopted by a majority representing not less than (i) 75% of the votes of
                          exercised by holders of all classes of shares in MTNZ (including the MTNZ
                          Pref Shares) present and entitled to vote; and (ii) 75% of the votes
                          exercised by MTNZ Shareholders present and entitled to vote, either in
                          person or by proxy;

                8.1.3     the special resolution referred to above not being opposed by 15% or
                          more of the voting rights exercised on such resolution under either (i) or
                          (ii) thereof, or; should the resolution be opposed by 15% or more of the
                          voting rights exercised on it, no person who voted against the special
                          resolution requiring MTNZ to seek the approval of the court in terms of
                          section 115(3) of the Companies Act;

                8.1.4     if the special resolution referred to above is opposed by 15% or more of
                          the voting rights exercised on such resolution, and a person who voted
                          against the special resolution requires the Company to seek the approval
                          of the Court in terms of section 115(3) of the Companies Act and MTNZ
                          waives the condition in paragraph 8.1.3, MTNZ does not elect to treat
                          the special resolution as a nullity in terms of section 115(5) of the
                          Companies Act;

                8.1.5     no leave is granted by the Court, pursuant to section 115(3)(b) of the
                          Companies Act, to any person who voted against the special resolution
                          and who applied to the Court for a review of the Scheme;

                8.1.6     within the period prescribed under section 164(7) of the Companies Act,
                          no valid demands having been received by, or remain capable of being
                          given to, MTNZ in terms of such section which in aggregate represent
                          more than 5% of the MTNZ Shares;

                8.1.7     in the predicate that the New Empowerment Transaction is
                          implemented, the amount (if applicable) for which MTNZ has agreed
                          with MTN to bear the economic cost and risk, as it relates to security
                          required to be provided for by MTNZ in terms of the funding agreements
                          pertaining to the MTNZ Pref Shares, not exceeding R100 000 000 (“A
                          Indemnified Amount”), and between them, MTN and MTNZ having
                          agreed how this amount (if applicable) is to be funded;

                8.1.8     MTN not having, on or prior to the Fulfilment Date and Time, delivered
                          a notice to MTNZ recording that it is of the opinion that an “MTN
                          Material Adverse Event”, as such term is defined in the Implementation
                          Agreement, has occurred or is likely to occur on or before the applicable
                          Operative Date; and

                8.1.9     on Thursday, 17 November 2016, there being no “Enforcement Action”,
                          as such term will be defined in the MTNZ Scheme Circular, ongoing by or
                          on behalf of any party.

            The above conditions may be waived, in whole or in part, by MTN and MTNZ, acting
            jointly.

8.2         The Scheme is further subject to the following two conditions which must be satisfied (or
            waived by MTN) prior to the applicable Operative Date:

                  8.2.1      there being no "Enforcement Action" 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; and

                  8.2.2      if the New Empowerment Transaction is not implemented, the Scheme
                             is further subject to the condition that the amount (if applicable), as it
                             relates to security required to be provided for by MTNZ in terms of the
                             funding agreements pertaining to the MTNZ Pref Shares, not exceeding
                             R100 000 000.

8.3         An announcement will be released on SENS and published in the South African press as
            soon as possible after the fulfilment, waiver or non-fulfilment, as the case may be, of the
            above Scheme conditions.

8.4         Notwithstanding the fulfilment or waiver of the Scheme Conditions Precedent set out in
            paragraph 8.1 above, the implementation of the New Empowerment Transaction (and
            accordingly the ability of MTNZ Shareholders to elect and be transferred MTNZ Futhi
            Consideration Shares as part of the Scheme Consideration) is subject to the fulfilment or
            waiver of certain conditions precedent by no later than Monday, 21 November 2016, (or
            such later date as may be agreed in writing between the relevant parties).

9.    SALIENT DATES AND TIMES

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

                                                                                             2016
      Record date for posting the MTNZ Scheme Circular                        Friday, 2 September
      Circular and Prospectus posted to MTNZ Shareholders no later           Monday, 12 September
      than
      Notice convening the MTNZ Shareholders' meeting (“MTNZ                 Monday, 12 September
      Shareholders’ Meeting”) published on SENS on
      Scheme Consideration election period opens                             Monday, 12 September
      Notice convening MTNZ Shareholders' meeting published in the          Tuesday, 13 September
      South African press on
      Last day to trade in MTNZ Shares in order to be recorded in the       Tuesday, 27 September
      register on the Voting Record Date in order to be eligible to vote
      at the MTNZ Shareholders' Meeting on
      Voting Record Date to be eligible to vote at the MTNZ                  Friday, 30 September
      Shareholders' Meeting by close of trading on
      Proxy forms for the MTNZ Shareholders' Meeting to be lodged               Friday, 7 October
      with the MTNZ transfer secretaries, Link Market Services
      Proprietary Limited, by 14:00 on
      Last date and time for MTNZ Shareholders to give notice, in             Tuesday, 11 October
      terms of section 164(3) of the Companies Act, to MTNZ
      objecting to the special resolution approving the MTNZ
      Unwinding Scheme by 14:00 on
      MTNZ Shareholders' Meeting to be held at the Sandton                    Tuesday, 11 October
      Convention Centre, 161 Maude Street, Sandton, Johannesburg
      at 14:00 on
      Publication of results of the MTNZ Shareholders' Meeting on           Wednesday, 12 October
      SENS on
      Publication of results of the MTNZ Shareholders' Meeting in the        Thursday, 13 October
      South African press on
      If the MTNZ Unwinding Scheme is approved by MTNZ
      Shareholders at the MTNZ Shareholders' Meeting:
      Last day to trade to participate in the MTNZ Re-investment              Tuesday, 18 October
      Offer on
      MTNZ Shares trade ex the MTNZ Re-investment Offer on                  Wednesday, 19 October
      Last date on which MTNZ Shareholders which hold their MTNZ            Wednesday, 19 October
      Shares through the Custody Entity can make an election in
      respect of the MTNZ Re-investment Offer by 12:00 on
      Last date on which MTNZ Shareholders can make an election in             Friday, 21 October
      respect of the MTNZ Re-investment Offer by 12:00 on
      MTNZ Re-investment Offer Record Date, being the date on                  Friday, 21 October
      which MTNZ Shareholders must be recorded in the register to
      be able to elect (and to subsequently be allocated) MTNZ Futhi
      Consideration Shares (subject to the Scaling Principles) under
      the MTNZ Re-investment Offer, 12:00 on
      Last date on which MTNZ Shareholders can make application to            Tuesday, 25 October
      the Court in terms of section 115(3)(b) of the Companies Act
      Last date for MTNZ to send objecting MTNZ Shareholders                  Tuesday, 25 October
      notices of the adoption of the special resolution approving the
      MTNZ Unwinding Scheme, in terms of section 164(4) of the
      Companies Act
      Last day to trade to participate in the Scheme Consideration           Tuesday, 15 November
      (other than the MTNZ Futhi Consideration Shares component)
      on
      Suspension of listing of MTNZ Shares on the JSE at                   Wednesday, 16 November
      commencement of trading on                                           
      Last date on which MTNZ Shareholders which hold their MTNZ           Wednesday, 16 November
      Shares through the Custody Entity can make an election in                  
      respect of the MTN Consideration Shares and/or Cash
      Consideration components of the Scheme Consideration by
      12:00 on
      Last date on which MTNZ Shareholders can make an election in            Friday, 18 November
      respect of the MTN Consideration Shares and/or Cash
      Consideration components of the Scheme Consideration by
      12:00 on
      Scheme Consideration Record Date, being the date on which               Friday, 18 November
      MTNZ Shareholders must be recorded in the register to receive
      the MTN Consideration Shares and/or Cash Consideration
      components of the Scheme Consideration (and, potentially, a
      cash top-up amount, if any), 12:00 on
      Operative Date of the Scheme is expected to be on                     Thursday, 24 November
      Certificates for the MTN Consideration Shares expected to be          Thursday, 24 November
      posted to 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 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 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 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                                                  

       Notes:

(a)    All dates and times may be changed by mutual agreement between MTN and MTNZ and/or
       may be subject to the obtaining of certain regulatory approvals. If the New Empowerment
       Transaction conditions precedent are not met by Tuesday, 22 November 2016, an updated
       timetable will be published on SENS and published in the South African press.

(b)    The 24 November 2016 Operative Date of the Scheme (and the subsequent market sales
       process on and from Friday, 25 November 2016) assumes that the New Empowerment
       Transaction conditions precedent are fulfilled (or deemed fulfilled) or waived by no later than
       Monday, 21 November 2016, and the New Empowerment Transaction is implemented on and
       from Wednesday, 23 November 2016. If, however, the New Empowerment Transaction
       conditions precedent are not fulfilled (or deemed fulfilled) or waived by Tuesday, 22
       November 2016, or if the New Empowerment Transaction is not implemented on and from
       Wednesday, 23 November 2016, then the Operative Date of the Scheme (and the date on and
       from which the subsequent market sales process will occur) may only be later (depending on
       if and when the implementation of the New Empowerment Transaction is terminated) and an
       updated timetable will be published on SENS and published in the South African press. If the
       New Empowerment Transaction is not implemented on and from Wednesday, 23 November
       2016, the Operative Date may potentially only occur on or about 15 December 2016
       (depending on when the implementation of the New Empowerment Transaction was
       terminated) with the market sales process following thereafter.

(c)    The MTN Consideration Shares and/or the MTNZ Futhi Consideration Shares have not, and
       will not be, registered under the US Securities Act, 1933 or with the regulatory authority of
       any state or jurisdiction of the United States of America or under the applicable laws of
       Canada, Australia or Japan and may not be offered, sold, pledged or otherwise transferred in
       the United States of America or to any national, resident or subject of Canada, Australia or
       Japan (unless they receive and accept the offer in terms of the Scheme in South Africa).
       Neither this document nor any copy of it, may be sent to or taken into the United States of
       America, Canada, Australia or Japan.

10.   WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT

      As the detailed terms of the unwinding of the MTN Zakhele scheme have been announced,
      MTNZ Shareholders are no longer required to exercise caution when dealing in their MTNZ
      Shares.

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

Independent Expert

QuestCo

Basis Points Capital

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