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

Transcription

1 MTN Zakhele (RF) Limited (Incorporated in South Africa) (Registration number 2010/004693/06) Share code: MTNZBE ISIN: ZAE ( 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 ( ) or visit the MTN Zakhele website 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 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: 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 ); 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

2 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; MTNZ Futhi raising third party finance (through the issue of preference shares); 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 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 R per MTN Share) ( Transaction Share Price ), which after the 20% discount equates to R 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 ):

3 1.8.1 a variable number MTN Shares ( MTN Consideration Shares ); and/or a cash consideration equal to the market price of the MTN Consideration Shares ( Cash Consideration ); and/or 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 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 Reinvestment 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 ( or by contacting the MTNZ Shareholder Call Centre ( ) 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 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

4 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 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 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:

5 Number of MTN Shares Value (R million) MTN Shares held by MTNZ MTNZ Specific Repurchase ( ) 3 ( ) 2 MTNZ Specific Repurchase to settle the notional vendor finance MTN Shares disposed of to settle MTNZ taxes and costs Net MTN Shares available for distribution after settlement of the third party preference share funding, notional vendor finance, taxes, costs and provisions MTN Shares available for distribution per MTNZ Share ( ) (639.7) 1 ( ) (554.7) R75.52 Notes: 1. Based on the 30 day volume weighted average price per MTN Share to 17 August 2016 of R multiplied by the number of MTN Shares. 2. Comprising the estimated MTNZ Pref Shares redemption amount, net of cash (R million), a general provisions amount (R21 million), MTN Zakhele s proportionate share of the A Indemnified Amount (R50 million) (see paragraph 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 R 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.

6 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

7 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"): 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; 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; 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; 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; 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; 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 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 R ( A Indemnified Amount ), and between them, MTN and MTNZ having agreed how this amount (if applicable) is to be funded; 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 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: 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 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 R 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: Record date for posting the MTNZ Scheme Circular 2016 Friday, 2 September

9 Circular and Prospectus posted to MTNZ Shareholders no later than Notice convening the MTNZ Shareholders' meeting ( MTNZ Shareholders Meeting ) published on SENS on Scheme Consideration election period opens Notice convening MTNZ Shareholders' meeting published in the South African press on Last day to trade in MTNZ Shares in order to be recorded in the 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 Shareholders' Meeting by close of trading on Proxy forms for the MTNZ Shareholders' Meeting to be lodged 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 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 Convention Centre, 161 Maude Street, Sandton, Johannesburg at 14:00 on Publication of results of the MTNZ Shareholders' Meeting on SENS on Publication of results of the MTNZ Shareholders' Meeting in the 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 Offer on MTNZ Shares trade ex the MTNZ Re-investment Offer on Last date on which MTNZ Shareholders which hold their MTNZ 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 respect of the MTNZ Re-investment Offer by 12:00 on MTNZ Re-investment Offer Record Date, being the date on 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 Monday, 12 September Monday, 12 September Monday, 12 September Tuesday, 13 September Tuesday, 27 September Friday, 30 September Friday, 7 October Tuesday, 11 October Tuesday, 11 October Wednesday, 12 October Thursday, 13 October Tuesday, 18 October Wednesday, 19 October Wednesday, 19 October Friday, 21 October Friday, 21 October

10 Last date on which MTNZ Shareholders can make application to the Court in terms of section 115(3)(b) of the Companies Act Last date for MTNZ to send objecting MTNZ Shareholders 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 (other than the MTNZ Futhi Consideration Shares component) on Suspension of listing of MTNZ Shares on the JSE at commencement of trading on Last date on which MTNZ Shareholders which hold their MTNZ 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 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 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 Certificates for the MTN Consideration Shares expected to be 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 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 process to settle the Cash Consideration component of the Scheme Consideration on or about Certificated MTNZ Shareholders expected to have the Cash Consideration (and any rounding cash amount and cash top-up amount, if applicable) paid into their nominated bank accounts on or about Tuesday, 25 October Tuesday, 25 October Tuesday, 15 November Wednesday, 16 November Wednesday, 16 November Friday, 18 November Friday, 18 November Thursday, 24 November Thursday, 24 November Thursday, 24 November Friday, 25 November Monday, 12 December

11 Dematerialised MTNZ Shareholders expected to have their 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 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 trading on or about Monday, 12 December Tuesday, 13 December Wednesday, 14 December Notes: (a) (b) (c) 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. 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 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. 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

12 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