MTN
MTN
MTN - MTN Group - Announcement Relating To The Distribution By Newshelf 664
(Proprietary) Limited Of MTN Group Limited Shares As A Dividend
In Specie To The Beneficiaries Of The Alpine Trust
MTN Group Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1994/009584/06)
(Share code MTN & ISIN ZAE000042164)
("MTN")
Newshelf and Alpine LOGO
ANNOUNCEMENT RELATING TO THE DISTRIBUTION BY NEWSHELF 664 (PROPRIETARY)
LIMITED OF MTN GROUP LIMITED SHARES AS A DIVIDEND IN SPECIE TO THE
BENEFICIARIES OF THE ALPINE TRUST
Introduction and background
In 2002, Newshelf 664 (Proprietary) Limited ("Newshelf") acquired 18.7% of
the issued ordinary shares of MTN Group Limited ("MTN"). This acquisition
was originally funded from various sources, and included variable-rate,
fixed-rate and equity-sharing funding instruments with a six-year term. It
was anticipated that the funding instruments would be redeemed in December
2008. MTN played no role in the setting up of Newshelf, nor in the
financing thereof.
During August 2007, some of the original funding instruments were redeemed
and refinanced with a variable-rate bridge loan instrument from the Public
Investment Corporation Limited ("PIC"). Newshelf currently holds 13.1% of
MTN.
Since 2002, the entire issued ordinary share capital of Newshelf has been
held by the Alpine Trust ("the Trust") for the benefit of eligible
permanent staff employed by MTN and its South African subsidiaries and
eligible senior staff members employed by MTN`s African operations. The
Trust has certain Black Economic Empowerment objectives which it has
substantially achieved. The participation ratios of the approximately 3,200
beneficiaries of the Trust ("the Beneficiaries"), the majority of whom are
previously disadvantaged individuals, vest over a six-year period, taking
into account the completed number of years of employment with MTN during
that six-year period, with final vesting taking place on 1 January 2009.
Newshelf and the Trust have entered into an agreement ("Special Dividend
Agreement") with PIC for the payment of a dividend in specie of MTN shares
to the Trust ("the Special Dividend") and the distribution of such dividend
to the Beneficiaries. The Special Dividend is anticipated to be paid early
in 2009, subject to the fulfilment or waiver of the condition precedent
referred to in paragraph 3.
As a result of the payment by Newshelf of the Special Dividend,
approximately 1.8% of the issued ordinary share capital of MTN will be
received by the Beneficiaries, based on the 20 trading day volume weighted
average price ("VWAP") of an MTN share up to 10 December 2008 of R100.01
("Reference Price").
The Special Dividend
The number of MTN shares constituting the Special Dividend will be
calculated based on the net asset value of Newshelf on 22 December 2008,
calculated with reference to the 20 trading day VWAP of an MTN share up to,
and including, 19 December 2008.
The MTN shares that constitute the Special Dividend will be distributed
early in 2009 to the Beneficiaries in accordance with the Beneficiaries`
participation ratios on 1 January 2009, after the retention of 300,000 MTN
shares to cover contingencies in the Trust. The balance of the proceeds
from these MTN shares, after the settlement of contingencies, will be
distributed to the Beneficiaries at a later date.
Immediately after the declaration of the Special Dividend, the Trust will
grant PIC a call option ("Call Option") to acquire the entire issued
ordinary share capital of Newshelf from the Trust for its residual nominal
value. The exercise of the Call Option by PIC is subject to the approval of
the relevant South African Competition Authorities.
Further to the abovementioned transactions, MTN and PIC have entered into a
memorandum of understanding ("MOU"), subject to certain conditions
precedent, whereby MTN has agreed to acquire the entire issued ordinary
share capital of Newshelf or the Call Option from PIC for its residual
nominal value. Further details of this transaction are contained in the
announcement released by MTN today.
Condition precedent
The implementation of the Special Dividend Agreement is subject to the
registration by the Registrar of Companies of special resolutions to amend
the articles of association of Newshelf that are necessary to give effect
to the Special Dividend Agreement.
Quantum of the Special Dividend
Based on the forecast balance sheet on 22 December 2008, using the
Reference Price or a VWAP of R95 per MTN share, the indicative Special
Dividend to be received by Beneficiaries, after deducting the 300,000 MTN
shares retained to cover contingencies in the Trust, will be as follows:
MTN share price
At At R95
Reference
Price
Value of the Special Dividend R3.4 R3.1
distributed to Beneficiaries billion billion
Number of MTN shares to be 34.4 32.9
distributed to Beneficiaries million million
Note that the final value of the Special Dividend will only be determined
on 22 December 2008. Price movements in the MTN share in the period between
10 December and 19 December 2008 will impact on the ultimate value of the
Special Dividend.
Further announcement and documentation
A further announcement will be made after 22 December 2008 indicating
whether the Special Dividend Agreement has become unconditional in
accordance with its terms. It is envisaged that further communication will
be sent to the Beneficiaries during January 2009 regarding the number of
MTN shares that they are entitled to receive, following the declaration of
the Special Dividend and the final vesting of their interests in the Trust.
15 December 2008
Lead advisor to Newshelf and Legal advisor to Newshelf
the Trust
(ENS logo)
(Nedbank Capital logo)
Lead advisor to PIC Tax advisor to Newshelf
(Cadiz logo) (Webber Wentzel logo)
Legal and tax advisor to PIC Advisor to PIC
(Deneys Reitz logo) (Quartile Capital logo)
Advisor to PIC
(Pan African logo)
Date: 15/12/2008 08:49:10 Produced by the JSE SENS Department.
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