MTN
MTN
MTN Group - Announcement
MTN Group Limited
(Incorporated in the Republic of South Africa)
(Registration Number 1994/009584/06)
(Share code MTN & ISIN: ZAE000042164)
("MTN Group" or "the Company")
WAIVER OF CERTAIN PROVISONS OF THE DEED OF COVENANT CONCLUDED WITH M1 AND
THE RESULTANT INCREASE IN MTN GROUP"S BLACK SHAREHOLDER BASE
1. Introduction
The Alpine Trust ("Alpine") together with M1 Limited ("M1") is
proposing to purchase MTN Group shares through a newly formed special
purpose vehicle ("Newco") ("the Transaction"). Any such purchases
will be in addition to the shares in the MTN Group which Alpine and M1
already own or in which they have an interest. An announcement to that
effect has been made by M1 and Alpine.
In order for the Transaction to proceed, the MTN Group board was
requested by Alpine and M1 to agree to the waiver of certain
shareholding limitations placed on M1 under the Deed of Covenant
entered into between M1 and MTN Group ("Deed of Covenant"), in terms
of which M1 sold its stake in Investcom LLC to the Company.
2. MTN board waiver of provisions in the Deed of Covenant
MTN Group believes that black economic empowerment ("BEE") is a key
requirement for the promotion of sustainable economic growth and
social development in South Africa. Besides its core business
objectives, MTN is committed to transformation in South Africa, both
at a shareholder level and throughout its business. The introduction
of the Codes of Good Practice ("the Codes") by the Department of Trade
and Industry ("DTI") under the Broad-Based Black Economic Empowerment
Act validates the approach taken in 2002 in the formation of Alpine.
The Codes place strong emphasis on broad-based empowerment such as
staff.
An independent sub-committee of the MTN Group board ("the Committee")
was established consisting of independent non-executive directors of
the Company in order to consider the impact of the Transaction. The
Committee has unanimously determined that the Transaction will have a
positive impact on the MTN Group in the form of enhanced BEE ownership
credentials and improved scoring in terms of the Codes.
Accordingly, in line with the Committee"s recommendation, the board of
the MTN Group has resolved to and effected a waiver of the relevant
clauses of the Deed of Covenant in respect of the Transaction. The
waiver of these provisions allows Newco and/ or M1 to acquire
additional MTN Group shares only pursuant to the Transaction. MTN
Group is not a party to the Transaction, other than providing the
waiver, and will not provide any financial assistance.
3. MTN Group directors" dealings
As a result of being beneficiaries of Alpine, PF Nhleko, RD Nisbet, RS
Dabengwa and directors of major subsidiaries who participate in Alpine
will have an indirect, beneficial interest in MTN Group shares that
are acquired by Newco. The beneficial interest will be in the form of
rights to participate in the predetermined residual equity sharing
ratio in the net surplus of Newco which may arise once all of Newco"s
obligations have been met including debt and financing obligations.
In addition, A.T.Mikati, as a result of being a director in M1, will
also have an indirect beneficial interest in MTN Group shares that are
acquired by Newco.
Further directors" dealings announcements will be made in due course
as MTN Group directors and/ or directors of major subsidiaries of MTN
are appointed to the board of Newco and/or Newco acquires MTN Group
shares.
Fairland
10 November 2006
Sponsor
Merrill Lynch South Africa
Date: 10/11/2006 01:33:56 PM Produced by the JSE SENS Department
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