MTN
MTN
MTN - MTN Group Limited - Announcement of infrastructure sharing strategy and
related joint Tower Company with American Tower Corporation in Ghana
MTN Group Limited
(Incorporated in the Republic of South Africa)
Registration number 1994/009584/06
Share code: MTN
ISIN code: ZAE000042164
("MTN" or "the Group")
ANNOUNCEMENT OF INFRASTRUCTURE SHARING STRATEGY AND RELATED JOINT TOWER COMPANY
WITH AMERICAN TOWER CORPORATION IN GHANA
1. INFRASTRUCTURE SHARING STRATEGY
* On 15 July 2010 the Group advised that it would increase its focus on
the following:
* optimising efficiencies including infrastructure sharing,
standardisation of systems and processes, rationalisation of
suppliers, cost management and cash optimisation;
* monitoring infrastructure investments to ensure appropriate levels of
capacity and quality of service, incorporating continued investment in
fibre and cable to service its evolving voice and data requirements;
* continued engagement with regulatory authorities in the development
and refinement of the telecommunications sector in its markets;
* investigating options to meaningfully improve cash returns to
shareholders; and
* conclusion of the MTN Black Economic Empowerment ("BEE") transaction.
Since this announcement, MTN has declared and paid a maiden interim
dividend and concluded its BEE transaction.
One of the key aspects of the Group strategy is to embark on an
infrastructure sharing initiative. MTN has in the recent past explored and
considered various permutations of the costs and benefits of passive
infrastructure sharing in its key markets. MTN has now resolved to pursue
more extensive passive infrastructure sharing in general, whilst taking
into consideration the unique prevailing circumstances of its operations in
each market. This is with a view to MTN ultimately establishing a tower
holding company at sub-Saharan Africa level. The Ghanaian market presents
an ideal opportunity to commence pursuing the Group`s medium term
objectives with respect to its towers.
2. JOINT TOWERCO IN GHANA
MTN and American Tower Corporation ("ATC") have today announced that they
have entered into a definitive agreement for the establishment of a joint
initiative in Ghana ("TowerCo Ghana"). ATC is a leading owner, operator and
developer of wireless and broadcast communications sites and currently owns
and operates approximately 33,000 communications sites in the United
States, Brazil, Chile, Colombia, India, Mexico and Peru. TowerCo Ghana,
which will be managed by ATC, will be at least 98.5% owned by a holding
company of which a wholly owned ATC subsidiary will hold a 51% share and a
wholly owned MTN Group subsidiary a 49% share. The transaction involves
the sale of up to 1,876 of MTN Ghana`s existing sites to TowerCo Ghana for
an agreed purchase price of $428.3m. This requires ATC to pay up to
approximately $218.5 million for its 51% stake in the holding company.
MTN Ghana will be the anchor tenant, on commercial terms, on each of the
towers being purchased. In addition, TowerCo Ghana is expected to build at
least 400 more sites for both MTN Ghana and other wireless operators in
Ghana over the next five years. MTN Group, ATC and MTN Ghana expect to
close the transaction by early 2011, subject to customary closing
conditions.
The agreement with ATC builds on an existing relationship between ATC and
MTN. In February 2010 ATC and MTN Ghana entered into a marketing and
services agreement which provided for ATC to assist MTN Ghana in
commercialising its tower portfolio and entering into passive
infrastructure sharing lease arrangements with operators in Ghana. The
marketing agreement in Ghana will be superseded by the agreements referred
to above on closing of the transaction.
Fairland
6 December 2010
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Financial Advisers Legal Advisers
Citigroup Global Markets Limited Freshfields Bruckhaus Deringer LLP
Joint Independent Financial Advisers to MTN Group Board on Ghana Transaction
Barclays Capital Absa Capital
Date: 06/12/2010 08:30:01 Produced by the JSE SENS Department.
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