MTN
MTN
MTN - MTN Group Limited - Press Release
MTN Group Limited
(Incorporated in the Republic of South Africa)
Registration Number 1994/009584/06
Share code MTN
ISIN ZAE000042164
("MTN" or "the Company")
PRESS RELEASE
MTN Group Limited ("MTN") is pleased to announce that 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.
Commenting, Phuthuma Nhleko, CEO of MTN said:
"The rationale for this potential transaction between MTN and Bharti is
highly compelling. It addresses our strategic imperative of becoming one of
the pre-eminent emerging market telecommunications companies with leading
positions in three of the fastest growing wireless markets globally - India,
Africa and the Middle East, with no overlapping footprint."
"We are excited at the prospect of teaming up with Bharti, India`s number one
wireless operator and one of the most strongly capitalised players amongst
its emerging market peer group. This would create a highly visible
commercial partnership between South Africa and India."
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 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, 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. 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.
Fairland
25 May 2009
Media enquiries:
Brunswick Group
Johannesburg Office: Tel: +27 11 502 7300
Rob Pinker - Managing Partner
Mobile:+27 83 326 7794
Marina Bidoli - Partner
Mobile:+27 83 253 0478
Byron Kennedy - Director
Mobile: +27 82 453 2066
London Office
Daniel Thole - Director
Mobile: +44 7834 502 518
Issued by sponsor: Deutsche Securities (SA) (Pty) Limited
Date: 25/05/2009 07:06:01 Produced by the JSE SENS Department.
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