PRE-LISTING STATEMENT

Transcription

1 MTN Zakhele (RF) Limited (Incorporated in South Africa) (Registration number 2010/004693/06) Share code: MTNZBE ISIN: ZAE ( MTN Zakhele ) 1 PRE-LISTING STATEMENT relating to the listing of MTN Zakhele Shares as Asset Backed Securities (being specialist securities under the JSE Listings Requirements) on the BEE Segment of the main board of the JSE, and will thus be BEE Securities, from the commencement of trade on 5 November 2015 This document does not constitute an offer to buy or sell MTN Zakhele Shares but is an information document only. The MTN Zakhele Shares are subject to various restrictions as set out in the MTN Zakhele MOI and the Relationship Agreement, including, inter alia, that they may only be owned by Eligible Shareholders and may not be Encumbered. Subsequent to the BEE Listing and for the duration of the BEE Listing Period, the trading in, and transfer of, MTN Zakhele Shares will be subject to the Verification Terms and Conditions. The JSE s approval of the BEE Listing should not be taken in any way as an indication of the merits of the BEE Listing. The JSE takes no responsibility for the contents of this document or the annual financial statements (as amended or restated from time to time), makes no representation as to the accuracy or completeness of any of the foregoing documents and expressly disclaims any liability for any loss arising from or in reliance upon the whole or any part of this document or the annual financial report (as amended or restated from time to time). The JSE has not verified the accuracy of the contents of this document and, to the extent permitted by law, the JSE will not be liable for any claim of whatever kind pursuant to the contents of this document not being accurate. No claims may be made against the JSE Guarantee Fund in respect of the MTN Zakhele Shares other than pursuant to the trading of the MTN Zakhele Shares on the JSE and in accordance with the terms of the rules of the JSE Guarantee Fund. Investors in MTN Zakhele should ensure that they fully understand the nature of the MTN Zakhele Shares and the extent of their exposure to risks in respect thereof, and that they consider the suitability of the MTN Zakhele Shares as an investment in the light of their own circumstances and financial position. The MTN Zakhele Shares are to be listed as Asset Backed Securities (being specialist securities under the JSE Listings Requirements) on the BEE Segment, and will thus be BEE Securities. Specialist securities involve a high degree of risk, including the risk of losing some or a significant part of their initial value. Potential investors should be prepared to sustain a total loss of their investment in such securities. The MTN Zakhele Shares rank pari passu with one another. At the date of the BEE Listing, the authorised share capital of MTN Zakhele will comprise MTN Zakhele Shares, Class A BIC Preference Shares and Class B BIC Preference Shares, and the issued share capital of MTN Zakhele will comprise fully paid-up MTN Zakhele Shares and fully paid-up Class A BIC Preference Shares. All of the Class B BIC Preference Shares have been redeemed. The JSE has granted MTN Zakhele a listing of a maximum of MTN Zakhele Shares as Asset Backed Securities on the BEE Segment of the main board of the JSE under the full name MTN Zakhele (RF) Limited with the abbreviated name of Zakhele (the JSE alpha code will be MTNZBE and the ISIN will be ZAE It is anticipated that the BEE Listing will be effective as from the commencement of trade on 5 November MTN Zakhele will list on the BEE Segment of the main board of the JSE pursuant to the use of a BEE Verification Agent as contemplated in the JSE Listings Requirements. The MTN Zakhele Shares will only be traded on the JSE in uncertificated form and accordingly all MTN Zakhele Shares currently held in certificated form (other than MTN Zakhele Shares held by Election Shareholders) will be converted into uncertificated form pursuant to the Bulk Dematerialisation. All MTN Zakhele Directors, whose names are set out herein, collectively and individually, accept full responsibility for the accuracy of the information given as it pertains to MTN Zakhele and certify that, to the best of their knowledge and belief, there are no other facts the omission of which would make any statement false or misleading in any material way and that they have made all reasonable enquiries to ascertain such facts and that this document contains all information required by law and the JSE Listings Requirements. MTN Zakhele accepts full responsibility for the accuracy of the information contained in this document and the annual financial report, the amendments to the annual financial report or any supplements from time to time, except as otherwise stated therein. Each of the merchant bank and sponsor, the corporate advisor and the corporate law advisors have consented in writing to act in the capacity stated and to its name being stated in this document and has not withdrawn its consent prior to the publication of this document. An abridged version of this document will be published on SENS on 28 October 2015 and in the press on 29 October This document is available on MTN Zakhele s website ( Date of issue: 28 October MTN Zakhele is a special purpose vehicle established for the purposes of facilitating the MTN BEE Transaction. The MTN Zakhele Board comprises of only non- executive directors, and MTN Zakhele does not employ any employees. Corporate advisor Merchant bank and sponsor Corporate law advisors

2 CORPORATE INFORMATION RELATING TO MTN ZAKHELE Company secretary Levitt Kirson Management Services Close Corporation (Registration number 1994/036439/23) 4th Floor, Aloe Grove Houghton Estate Office Park 2 Osborn Road Houghton, 2198 Transfer Secretaries Link Market Services South Africa Proprietary Limited (Registration number 2000/007239/07) 13th Floor, Rennie House 19 Ameshoff Street Braamfontein, 2001 (PO Box 4844, Johannesburg, 2000) Registered office MTN Zakhele (RF) Limited (Registration number 2010/004693/06) 4th Floor, Aloe Grove Houghton Estate Office Park 2 Osborn Road, Houghton, 2198 (Private Bag X9955, Cresta, 2118) MTN Zakhele Board SN Mabaso-Koyana (Non-executive chairperson) S de Bruyn Sebotsa (Non-executive) GG Gelink (Non-executive) Corporate advisor Tamela Holdings Proprietary Limited (Registration number 2008/011759/07) Ground Floor, Golden Oak House Bally Oaks Office Park 35 Ballyclare Drive Bryanston, 2021 (PO Box 379, Morningside, 2057) Corporate law advisors Webber Wentzel 10 Fricker Road Illovo Boulevard Illovo, 2196 (PO Box 61771, Marshalltown, 2107) Merchant bank and sponsor Rand Merchant Bank (a Division of FirstRand Bank Limited) (Registration number 1929/001225/06) 1 Merchant Place Corner Fredman Drive and Rivonia Road Sandton Johannesburg, 2196 (PO Box , Sandton, 2146) Auditors SizweNtsalubaGobodo Inc Registered auditors (Registration number 2002/021048/07) 20 Morris Street East Woodmead, 2191 South Africa (PO Box 2939, Saxonwold, 2132) Finance and administration Deloitte & Touche Accounting and Financial Advisory Deloitte Place, Building 1 The Woodlands 20 Woodlands Drive Woodmead, 2052 BEE Verification Agent Velocity Trade Financial Services Proprietary Limited (Registration number 2010/010415/07) 200 on Main, 1st Floor Main Road Claremont Cape Town, 7708 Telephone number:

3 CONTENTS CORPORATE INFORMATION RELATING TO MTN ZAKHELE Inside front cover DEFINITIONS AND INTERPRETATIONS 2 PRE-LISTING STATEMENT 1. Introduction, background and rationale for the Bee Listing Verification, trading and settlement of mtn zakhele shares during the bee Listing period Indemnity granted by MTN Zakhele 16 INFORMATION ON MTN ZAKHELE 4. Nature of business Underlying assets MTN Zakhele post November Risk factors associated with the MTN Zakhele shares 18 INFORMATION ON MTN ZAKHELE DIRECTORS AND MANAGEMENT 8. The MTN Zakhele management functions Information relating to the MTN Zakhele directors 21 INFORMATION RELATING TO MTN ZAKHELE SHARES 10. Share capital of MTN Zakhele Restrictions associated with MTN Zakhele shares 24 OTHER INFORMATION 12. Exchange Control Regulations Expenses of the BEE Listing Advisors interests MTN Zakhele directors responsibility statement Litigation statement Experts consents JSE sponsor Other information Documents available for inspection 29 Annexure A Extracts of the share price history of MTN Zakhele 33 Annexure B Summary of the key terms of the Class A bic Preference Shares (and indemnity and post redemption liabilities in relation to Class A and Class B bic preference Shares) 35 Annexure C Extracts of the mtn zakhele Memorandum of Incorporation 39 Documents incorporated by reference and available for inspection: Financial information on MTN is available on the MTN website ( Overview.aspx) and there is a link on the MTN Zakhele website ( to the financial information on MTN. Financial information on MTN Zakhele, is available on the MTN Zakhele website ( KeyFinancialInfo). 1

4 DEFINITIONS AND INTERPRETATIONS In this document and its annexures, unless otherwise stated or the context otherwise indicates, the words in the first column shall have the meanings stated opposite them in the second column and words in the singular shall include the plural and, vice versa, words importing natural persons shall include corporations and associations of persons and an expression denoting any gender shall include the other gender. Asset Backed Securities Authorised User Authority BBBEE Act BEE BEE Legislation BEE Listing BEE Listing Period BEE Securities BEE Segment BEE Status has the meaning given to such term in the JSE Listings Requirements from time to time; has the meaning given to such term in the FM Act; any government or governmental, administrative, fiscal or judicial authority, body, court, department, commission, tribunal, registry or any state owned, controlled or legislatively constituted authority which principally performs public, governmental or regulatory functions and/or which is responsible for applying national security, foreign investment, exchange control, telecommunications, merger control or other competition or antitrust legislation or regulations, in South Africa, including without limitation ICASA; the Broad-Based Black Economic Empowerment Act, 53 of 2003 and any regulations and codes of good practice published thereunder (including the Codes), as amended; black economic empowerment; each and all of (i) the BBBEE Act, (ii) any codes of good practice and/or any transformation charters issued under sections 9 and/or 12 of the BBBEE Act applicable to the MTN SA Group, (iii) any communications sector legislation (including the EC Act) and any regulations published under such legislation and any Licence conditions made pursuant to such legislation from time to time, as applicable to the MTN SA Group, and (iv) any other charter, law, condition of a material Licence, regulation or (mandatory or voluntary) practice pursuant to which ownership and/or control by Black People in the MTN SA Group is measured or a requirement relating thereto is imposed on it, or its rights, interests and/or obligations are affected thereby whether directly or through its customers; the admission to listing of the MTN Zakhele Shares as Asset Backed Securities (being specialist securities under the JSE Listings Requirements) on the BEE Segment of the main board of the exchange operated by the JSE, and will thus be BEE Securities, with effect from 5 November 2015; the period commencing on the date upon which the BEE Listing takes place (if applicable) and ending on the earlier of: the last day of the Empowerment Compliance Period; or the date on which the BEE Listing terminates for any reason; has the meaning given to such term in the JSE Listings Requirements from time to time; has the meaning given to such term in the JSE Listings Requirements from time to time; in relation to a Black Group, the Black Group s percentage ownership and percentage economic interest by Black People (by shareholding, membership, beneficiary interest and/or other comparable interest, as the case may be having regard to the juristic nature of the relevant Black Group) and the Black Group s percentage representation by Black People at board or trustee or other similar governing body, as measured under the BEE Legislation and, in relation to a natural person, whether or not that person qualifies as a Black Person; 2

5 BEE Transaction Documents BEE Verification BEE Verification Agent or BIC Verification Agent BFC or Black Funding Company BFC Investors BFC Preference Shareholders BFC Preference Shares BIC Preference Share Subscription Agreement BIC Preference Shareholders the Transaction Documents, and such further agreements and documents which MTN and MTN Zakhele agreed to in writing to designate as BEE Transaction Documents from time to time; the verification of a person by the BEE Verification Agent, which verification must conclude, inter alia, that: the person is an Eligible Shareholder; such Eligible Shareholder has been notified of the necessary restrictions, limitations and requirements applicable to such MTN Zakhele Shares from time to time as set out in the MTN Zakhele MOI and the Relationship Agreements, and has agreed to be bound by the provisions thereof; and such Eligible Shareholder has accepted the Verification Terms and Conditions and has signed all documents and contracts required in terms of the Verification Terms and Conditions, and BEE Verified shall have a corresponding meaning; during the BEE Listing Period, a person appointed from time to time by MTN and/or MTN Zakhele (with the consent of MTN), to fulfil the functions assigned to it under the Relationship Agreement in respect of performing BEE Verification, as at the Last Practicable Date being Velocity; Newshelf 1041 Proprietary Limited, registration number 2009/023961/07, a private company incorporated in accordance with the laws of South Africa, the special purpose vehicle created to facilitate the third party preference share funding for the MTN BEE Transaction; as at the Last Practicable Date are United Towers Proprietary Limited, Depfin Investments Proprietary Limited and FirstRand Bank Limited, acting through its Rand Merchant Bank division; the holders of the BFC Preference Shares; the Class A BFC Preference Shares and the Class B BFC Preference Shares; the preference share subscription agreement entitled BIC Preference Share Subscription Agreement concluded between BFC, MTN Zakhele and the Preference Share Agent on 12 July 2010, as amended from time to time, in terms of which, inter alia, BFC subscribed for, and MTN Zakhele allotted and issued to BFC, the BIC Preference Shares; the Class A BIC Preference Shareholders and the Class B BIC Preference Shareholders; BIC Preference Shares the Class A BIC Preference Shares and the Class B BIC Preference Shares; Black Company Black Entity Black Group a company incorporated in accordance with the laws of South Africa, and which is both a Black Majority Owned Company and a Black Majority Controlled Company, and a reference to company in this definition shall include a reference to a close corporation; (i) a vesting trust, (ii) a broad based ownership scheme, and (iii) an unincorporated entity or association, including a partnership, joint venture, syndicate or stokvel, in each case under (i) to (iii) as may be determined from time to time (generally or in relation to any particular Black Entity or category of Black Entities) by MTN in its sole discretion as an entity which qualifies under the BEE Legislation (and the Codes in particular) for recognition and measurement or ownership, economic interest and control by Black People such that the MTN SA Group may claim recognition of such ownership, economic interest and control under the BEE Legislation as all being held by a majority of Black People; a Black Company or Black Entity; 3

6 Black Majority Controlled Company Black Majority Owned Company Black Participant Black People or Black Person Black Public a BEE controlled company (or comparable term) as defined from time to time under the BEE Legislation, which definition as at the Last Practicable Date is summarised as follows for convenience, and should not be construed as an interpretation of the Codes: in relation to any company, means a company incorporated in accordance with the laws of South Africa and having a shareholding in which one or more Black People controls or control, on an effective flow-through basis (as such term is contemplated in the Codes, and which, for the avoidance of doubt, excludes measurement utilising the modified flow-through principle), in excess of 50% of all exercisable voting rights in relation to the ordinary shares and/or other equity interests of such company, exercisable by members in general meeting or otherwise; provided that where the BEE Legislation contains more than one definition of a Black Majority Controlled Company and such definitions are not the same, then the term Black Majority Controlled Company shall mean (and be restricted to) the class of persons who satisfy the relevant criteria in every such definition; a BEE owned company (or comparable term) as defined from time to time under the BEE Legislation, which definition as at the Last Practicable Date is summarised as follows for convenience, and should not be construed as an interpretation of the Codes: in relation to any company, means a company incorporated in accordance with the laws of South Africa and having a shareholding in which one or more Black People: beneficially owns or own, on an effective, flow-through basis (as such term is contemplated in the Codes, and which, for the avoidance of doubt, excludes measurement utilising the modified flow-through principle), in excess of 50% of the ordinary shares and/or other equity interests of such company; and is or are entitled to, on an effective, flow-through basis (as such term is contemplated in the Codes, and which, for the avoidance of doubt, excludes measurement utilising the modified flow-through principle) in excess of 50% of all economic interest in relation to such ordinary shares and/or other equity interests of such company, provided that where the BEE Legislation contains more than one definition of a Black Majority Owned Company and such definitions are not the same, then the term Black Majority Owned Company shall mean (and be restricted to) the class of persons who satisfy the relevant criteria in every such definition; individually and collectively (as the context may dictate), Black People, Black Companies and Black Entities, who are eligible to subscribe for and directly and beneficially own MTN Zakhele Shares in terms of the provisions of the Relationship Agreement; black people (or comparable term) as defined from time to time under the BEE Legislation; provided that where the BEE Legislation contains more than one definition of black people (or comparable term) and such definitions are not the same, then the term Black People shall mean (and be restricted to) the class of persons who satisfy the relevant criteria in every such definition. As at the date of this document (by way of summary and without in any way being construed as an interpretation of the Codes), Black People are defined under the BBBEE Act read with Schedule 1 of the Codes, as being African, Coloured (including Chinese) and Indian persons who are natural persons and who: are citizens of South Africa by birth or descent; or are citizens of South Africa by naturalisation before the commencement date of the Constitution of the Republic of South Africa, Act 200 of 1993 (Interim Constitution); or became citizens of South Africa after the commencement date of the Interim Constitution, but who, but for the apartheid policy that had been in place prior to that date, would have been entitled to acquire citizenship by naturalisation prior to that date; Black People and Black Groups; 4

7 BSTC or BIC Share Transfer Committee Bulk Dematerialisation Bulk Dematerialised Shareholders Bulk Dematerialisation Shares Business Day Call Event Call Reference Price Certificated MTN Zakhele Share Class A BIC Preference Shareholder Class A BIC Preference Shares Class A BFC Preference Shareholders Class A BFC Preference Shares Class B BFC Preference Shareholders Class B BFC Preference Shares Class B BIC Preference Shareholder Class B BIC Preference Shares Codes MTN or such committee/s or third party/ies or third party agent/s as MTN may nominate from time to time to fulfil the functions assigned to the BSTC under the Relationship Agreement; the process by which all the Certificated MTN Zakhele Shares held by the Bulk Dematerialised Shareholders are converted, on the date of the BEE Listing, to Uncertificated MTN Zakhele Shares and such Uncertificated MTN Zakhele Shares are transferred into the name of the Custody Entity so as to be held by it for and on behalf of the Bulk Dematerialised Shareholders; all MTN Zakhele Shareholders who are not Election Shareholders who will have their MTN Zakhele Shares dematerialised pursuant to the Bulk Dematerialisation; the MTN Zakhele Shares that have been dematerialised pursuant to the Bulk Dematerialisation; any day other than a Saturday, Sunday or gazetted national public holiday in South Africa; has the meaning given to this term in the Relationship Agreement, as referred to in paragraph 11 of this document; is the price determined in accordance with the provisions of the Relationship Agreement, as referred to in paragraph 11 of this document; an MTN Zakhele Share which is evidenced by way of a certificate, and which is recorded as such in MTN Zakhele s securities register (maintained by MTN Zakhele, or by the Transfer Secretaries on behalf of MTN Zakhele, from time to time); the holder of the Class A BIC Preference Shares, being as at the last Practicable Date, BFC; the class A cumulative redeemable non-participating preference shares in the issued share capital of MTN Zakhele, having the preferences, rights, limitations and other terms as are provided for in the MTN Zakhele MOI read with the BIC Preference Share Subscription Agreement; the holders of the Class A BFC Preference Shares, being as at the last Practicable Date, the BFC Investors; the class A cumulative redeemable non-participating preference shares in the issued share capital of BFC, having the preferences, rights, limitations and other terms as are provided for in the BFC memorandum of incorporation and which are substantially the same terms as the Class A BIC Preference Shares; the holders of the Class B BFC Preference Shares, which as at their last redemption date, were the BFC Investors; the class B cumulative redeemable non-participating preference shares in the issued share capital of BFC, having the preferences, rights, limitations and other terms as are provided for in the BFC memorandum of incorporation and which are substantially the same terms as the Class B BIC Preference Shares. All the Class B BFC Preference Shares have been redeemed; the holders of the Class B BIC Preference Shares, being as at the last Practicable Date, BFC; the class B cumulative redeemable non-participating preference shares in the issued share capital of MTN Zakhele, having the preferences, rights, limitations and other terms as are provided for in the MTN Zakhele MOI read with the BIC Preference Share Subscription Agreement. All the Class B BIC Preference Shares have been redeemed; the Codes of Good Practice on Broad Based Black Economic Empowerment issued by the Minister of Trade and Industry in terms of Section 9 of the BBBEE Act from time to time; 5

8 Common Monetary Area Companies Act Controlled Client CSDP Custodian Custody Entity or Issuer Nominated Participant South Africa, the Republic of Namibia and the Kingdoms of Lesotho and Swaziland; the Companies Act, 71 of 2008, as amended; a controlled client of a JSE Member as contemplated under the JSE Equities Rules and Directives from time to time; a Central Securities Depository Participant, accepted as a participant in terms of the FM Act; a person appointed from time to time by MTN and/or MTN Zakhele, as directed by MTN, to fulfil the functions assigned to it under the Relationship Agreement, as at the Last Practicable Date being Link Market Services; the person designated by MTN Zakhele from time to time to act in such capacity, the Custody Entity initially being Link Investor Services, acting through its nominee, Pacific Custodians (Nominees) (RF) Proprietary Limited, registration number 2014/113298/07, a private company incorporated in accordance with the laws of South Africa being a whollyowned subsidiary of Link Investor Services; this document this bound pre-listing statement and all its annexures dated 28 October 2015; documents of title EC Act Election End Date Election Shareholders Eligible Shareholder Emigrant empowerment Compliance Period or BIC Empowerment Compliance Period Encumbrance Exchange Control Regulations FM Act valid share certificate(s), share statements, certified transfer deed(s), balance receipts or any other documents of title acceptable to MTN Zakhele in respect of MTN Zakhele Shares; the Electronic Communications Act, 36 of 2005, as amended; the date falling five Business Days prior to the date of the BEE Listing, being 29 October 2015; those MTN Zakhele Shareholders holding Certificated MTN Zakhele Shares who have by the Election End Date elected not to participate in the Bulk Dematerialisation and to continue to hold their MTN Zakhele Shares in certificated form; (a) any Black Participant who is accepted to become an MTN Zakhele Shareholder (i) in MTN s (or its nominee, delegatee or agent) sole discretion, such acceptance to be recorded in writing or (ii) pursuant to any decision made by the BSTC (or its nominee, delegatee or agent) in accordance with the Relationship Agreement (unless MTN determines otherwise on written notice to the BSTC in respect of such decision), such acceptance by the BSTC to be recorded in writing, (and in the case of either (i) or (ii), including, if applicable, through the OTC trading platform, or the BEE Listing and its related processes, for example BEE Verification) and (b) such other persons as are permitted from time to time (and for the period so permitted) under the Relationship Agreement to hold MTN Zakhele Shares; any emigrant from the Common Monetary Area whose address is outside the Common Monetary Area; a period of six years which commenced on 24 November 2010 and ends on 24 November 2016; in relation to any property, includes any pledge, security cession, charge, hypothecation, lien, subordination, mortgage, option over, right of retention or any other encumbrance whatsoever, or any form of hedging or similar derivative instrument of any nature whatsoever of or over or in respect of that property or class of property (or any part or proceeds thereof), or any lending of that property, and, the words Encumber, Encumbered and Encumbering shall have corresponding meanings; the Exchange Control Regulations, 1961, as amended, made in terms of section 9 of the Currency and Exchanges Act, 9 of 1933, as amended; the Financial Markets Act, 19 of 2012, as amended; 6

9 FSB Finance Documents ICASA IFRS ISIN JSE JSE Member Last Practicable Date License Link Investor Services Link Market Services Market Participant MTN MTN BEE Transaction MTN Group MTN Holdings MTN SA Group MTN Shares Financial Services Board, established by section 2 of the Financial Services Act, 97 of 1990, as amended; has the meaning given to this term in the BIC Preference Share Subscription Agreement; the Independent Communications Authority of South Africa, a regulatory body established in terms of section 3 of the Independent Communications Authority of South Africa Act, 13 of 2000, as amended; International Financial Reporting Standards; International Securities Identification Number; as the context requires, either JSE Limited, registration number 2005/022939/06, a public company incorporated in accordance with the laws of South Africa and licensed to operate an exchange under the Financial Markets Act, or the shares exchange operated by that company; a member of the JSE; the last practicable date prior to the finalisation of this document being 19 October 2015; any license or other form of regulatory right or permission issued or granted by or under any Authority, including telecommunications licenses issued pursuant to the EC Act; Link Investor Services South Africa Proprietary Limited, registration number 2011/001308/07, a private company incorporated in accordance with the laws of South Africa; Link Market Services South Africa Proprietary Limited, registration number 2000/007239/07, a private company incorporated in accordance with the laws of South Africa; a JSE Member, registered holder, CSDP and/or relevant intermediary, as the context may require; MTN Group Limited, registration number 1994/009584/06, a public company incorporated in accordance with the laws of South Africa; the ordinary shares of which are listed on the JSE; MTN s BEE transaction in terms of which (i) MTN Zakhele issued MTN Zakhele Shares to qualifying members of the Black Public and (ii) MTN Zakhele acquired and/or subscribed for MTN Shares, up to a maximum of 4% of the issued share capital of MTN (using a combination of equity vendor facilitation, the Notional Vendor Finance, a subordinated loan and third-party preference share funding); MTN and its subsidiaries and associates, including joint ventures where appropriate, from time to time; Mobile Telephone Networks Holdings Proprietary Limited, registration number 1993/001411/07, a private company incorporated in accordance with the laws of South Africa; each and all of (i) Mobile Telephone Networks Proprietary Limited, MTN Service Provider Proprietary Limited and MTN Business Solutions Proprietary Limited and each of its and their South African subsidiaries from time to time and (ii) any other South African operating subsidiary of any of MTN, MTN Holdings and/or MTN International Proprietary Limited designated in writing by MTN to MTN Zakhele from time to time; ordinary shares with a par value of R each in the share capital of MTN; MTN Zakhele or BIC MTN Zakhele (RF) Limited, registration number 2010/004693/06 (previously known as Aralia Investments Limited), a public company incorporated in accordance with the laws of South Africa on 10 March 2010, the special purpose vehicle created to effect the MTN BEE Transaction and related aspects of the MTN BEE Transaction; 7

10 MTN Zakhele BEE Contract mtn zakhele Board or MTN Zakhele Directors mtn Zakhele Facilitated Trading Process mtn Zakhele Facilitated Trading Process Verification Terms and Conditions mtn Zakhele Independent Trading Process mtn Zakhele Independent Trading Process Verification Terms and Conditions mtn Zakhele Limited Transfers Process mtn Zakhele Limited Transfers Process Verification Terms and Conditions MTN Zakhele MOI MTN Zakhele Shareholder MTN Zakhele Shares has the meaning given to this term in the MTN Zakhele Independent Trading Process Verification Terms and Conditions; the board of directors of MTN Zakhele, as constituted from time to time; the process of holding, buying or selling MTN Zakhele Shares from time to time in terms of which a Verified Shareholder enters into a contractual custody arrangement with the Custody Entity (who shall act as registered shareholder) and a mandate arrangement with the Trading Entity for the purposes of effecting transfers of its MTN Zakhele Shares through the JSE s trading processes, as contemplated in the MTN Zakhele Facilitated Trading Process Verification Terms and Conditions; the document titled MTN Zakhele Facilitated Trading Process: Verification Requirements, Terms and Conditions available at which document records the terms, conditions, restrictions and limitations applicable to each Verified Shareholder who elects to hold, buy or sell any MTN Zakhele Shares in terms of the MTN Zakhele Facilitated Trading Process, and which are acknowledged and accepted by such Verified Shareholder during the BEE Verification process; the process of holding, buying, selling or otherwise transferring MTN Zakhele Shares from time to time in accordance with the MTN Zakhele BEE Contract; the document titled MTN Zakhele Independent Trading Process: Verification Requirements, Terms and Conditions available at www. mtnz. co.za, which document records the terms, conditions, restrictions and limitations applicable to each Verified Shareholder who elects to hold, buy, sell or otherwise transfer any MTN Zakhele Shares in terms of the MTN Zakhele Independent Trading Process, and which are acknowledged and accepted by such Verified Shareholder during the BEE Verification process; the process of holding, buying, selling or otherwise transferring MTN Zakhele Shares by a Verified Shareholder pursuant to an Off Market Transfer, as contemplated in the MTN Zakhele Limited Transfers Process Verification Terms and Conditions; the document titled MTN Zakhele Limited Transfers Process: Verification Requirements, Terms and Conditions available at which document records the terms, conditions, restrictions and limitations applicable to each Verified Shareholder who elects to hold, buy, sell or otherwise transfer any MTN Zakhele Shares pursuant to an Off Market Transfer, and which are acknowledged and accepted by such Verified Shareholder during the BEE Verification process; the memorandum of incorporation of MTN Zakhele; means: subject to the succeeding bullet, during the Empowerment Compliance Period, any person who is the registered holder of MTN Zakhele Shares from time to time; during the BEE Listing Period, any person who is the beneficial holder of MTN Zakhele Shares from time to time; and after the Empowerment Compliance Period, any person who is the beneficial and/or registered holder of MTN Zakhele Shares from time to time; ordinary shares having a par value of R0.01 each in the issued share capital of MTN Zakhele; 8

11 Nominee Non-Controlled Client nvf or Notional Vendor Finance Off Market Transfer On Market Transaction OTC trading platform Preference Share Agent Rand or R Relationship Agreement SENS South Africa Strate Subordination and Undertaking Agreement Total Share Cover Ratio Trading Entity Transaction Documents Transfer Secretaries Uncertificated MTN Zakhele Shares a person which acts as the registered holder of MTN Zakhele Shares and manages an interest in MTN Zakhele Shares on behalf of other persons, and which has been approved by: an exchange in terms of section 76(1)(a) of the FM Act: a central securities depository in terms of section 76(1)(b) of the FM Act; or the Registrar of Securities Services in terms of section 76)(3) of the FM Act; a non-controlled client of a JSE Member as contemplated under the JSE Equities Rules and Directives from time to time; the notional funding provided by MTN to MTN Zakhele in connection with the MTN BEE Transaction; any sale, purchase or transfer of MTN Zakhele Shares not reported through an Authorised User; any sale or purchase of MTN Zakhele Shares reported through an Authorised User; the over-the-counter trading platform facilitated by MTN Zakhele (through various service providers) pursuant to the MTN BEE Transaction specifically for the purposes of facilitating trading in the MTN Zakhele Shares by and amongst Eligible Shareholders; the entity appointed as such from time to time as the agent of the BFC Preference Shareholders and the BIC Preference Shareholders pursuant to the terms of the Transaction Documents; the South African Rand, the official currency of South Africa; the agreement entitled Amended and Restated Relationship Agreement concluded between MTN Zakhele and MTN on 29 September 2015 and to which each MTN Zakhele Shareholder is or becomes a party, which agreement regulates, inter alia, the rights and obligations of these parties relating to the holding of MTN Shares by MTN Zakhele and the holding of MTN Zakhele Shares by the MTN Zakhele Shareholders; the Stock Exchange News Service of the JSE; the Republic of South Africa; an electronic settlement environment for transactions to be settled and transfer of ownership to be recorded electronically, managed by Strate Proprietary Limited, registration number 1998/022242/07, a private company incorporated in accordance with the laws of South Africa; has the meaning given to this term in the BIC Preference Share Subscription Agreement; has the meaning given to this term in the MTN Zakhele MOI; the person designated by MTN Zakhele from time to time to act in such capacity, which shall act as agent on behalf of each MTN Zakhele Shareholder who elects to use the MTN Zakhele Facilitated Trading Process, the Trading Entity initially being Velocity; has the meaning given to this term in the BIC Preference Share Subscription Agreement; Link Market Services; an MTN Zakhele Share which has been dematerialised and is no longer evidenced by way of a certificate, and which is recorded as such in MTN Zakhele s uncertificated securities register (as administered and maintained by a CSDP or Central Securities Depository, as determined in accordance with the rules of the Central Securities Depository, and which forms part of MTN Zakhele s securities register); 9

12 Velocity Verification Terms and Conditions Verified Shareholder Velocity Trade Financial Services Proprietary Limited, registration number 2010/010415/07, a private company incorporated in accordance with the laws of South Africa, a wholly owned subsidiary of Velocity Trade International Limited (UK); the terms, conditions, restrictions and limitations applicable to each Verified Shareholder and acknowledged and accepted by such Verified Shareholder during the BEE Verification process, being as the context may require: the MTN Zakhele Facilitated Trading Process Verification Terms and Conditions; the MTN Zakhele Independent Trading Process Verification Terms and Conditions; and the MTN Zakhele Limited Transfers Process Verification Terms and Condition; and during the BEE Listing Period, any Eligible Shareholder that MTN Zakhele (or its nominee, delegatee or agent) confirms as having successfully completed BEE Verification, and whose BEE Verification status has not expired or been withdrawn in accordance with the Verification Terms and Conditions or the Relationship Agreement. 10

13 MTN Zakhele (RF) Limited (Incorporated in South Africa) (Registration number 2010/004693/06) Share code: MTNZBE ISIN: ZAE MTN Zakhele Directors Non-executive SN Mabaso-Koyana (Non-executive chairperson) S de Bruyn Sebotsa (Non-executive) GG Gelink (Non-executive) PRE-LISTING STATEMENT 1. INTRODUCTION, BACKGROUND AND RATIONALE FOR THE BEE LISTING 1.1 Incorporation MTN Zakhele was established in 2010 as a ring fenced vehicle for previously disadvantaged South Africans to invest in the MTN Group, a leading emerging markets telecommunications service provider. MTN Zakhele s 4% stake in MTN, along with other transformation and empowerment initiatives, supports MTN s status as a leading BEE-driven telecommunications company. The main object of MTN Zakhele is to exercise its rights and perform its obligations under the Transaction Documents, and to hold MTN Shares. If MTN Zakhele is wound up, the assets remaining after payment of the debts and liabilities of MTN Zakhele and the costs of liquidation will be applied in accordance with the Companies Act, the Insolvency Act, 24 of 1936, as amended, and the MTN Zakhele MOI. As MTN is a listed company, all relevant information relating to MTN can be obtained from its website ( or publicly issued documents. 1.2 Background In 2010, a maximum of MTN Zakhele Shares were offered at R20.00 each to the Black Public pursuant to a public offer for subscription in terms of the MTN BEE Transaction. The total value of the public offer in relation to the MTN BEE Transaction was R1,618 million, and as a result of such public offer, approximately qualifying black investors became shareholders in MTN Zakhele holding in aggregate MTN Zakhele Shares (although the public offer was over-subscribed, due to administrative errors, certain subscription applications had to be rejected and refunded). MTN Zakhele was, at the time of the implementation of the MTN BEE Transaction, South Africa s largest empowerment scheme in the telecommunications industry. The MTN BEE Transaction, valued at approximately R8.1 billion, was concluded as part of MTN s on-going efforts to further its BEE objectives in South Africa, and in particular resulted in MTN Zakhele owning approximately 4% of MTN. Following the conclusion of the initial three-year minimum investment period, MTN Zakhele commenced operation of the OTC trading platform on 25 November 2013, thereby facilitating the MTN Zakhele Shareholders to trade their MTN Zakhele Shares with other qualifying Black Participants. The Empowerment Compliance Period is still in effect, and will terminate at 23:59:59 on 24 November During the Empowerment Compliance Period, the holding, buying, selling and otherwise transferring of MTN Zakhele Shares remains restricted as contemplated under the Relationship Agreement, which restrictions include the approval by the BSTC in respect of a transfer. There will be no restrictions on the sale or Encumbrance of MTN Zakhele Shares after the Empowerment Compliance Period. 11

14 Since the inception of the OTC trading platform on 25 November 2013, over R1.1 billion of MTN Zakhele Shares have been traded by and amongst qualifying Black Participants. The trading history of the OTC trading platform is set out in Annexure A. Prior to the commencement of trading on the OTC trading platform, MTN Zakhele was granted a temporary exemption by the FSB on 8 October The temporary exemption exempted MTN Zakhele from the requirement to apply for an exchange license in accordance with the FM Act. This exemption was granted on a temporary basis pending clarification by the FSB of the OTC regulatory regime. Following a period of public consultation which commenced in December 2013, the FSB issued a final directive on 11 July 2014, which required companies providing infrastructures to facilitate trading in their own shares (i.e. by way of OTC platforms) to: change their operating models and methodologies such that they no longer render the functions of an exchange; or list on a licensed stock exchange; or apply for an exchange licence in accordance with the FM Act; or obtain an appropriate exemption from the FSB. The MTN Zakhele Board has determined that MTN Zakhele will pursue a listing of the MTN Zakhele Shares as Asset Backed Securities on the BEE Segment of the JSE s main board (thus constituting BEE Securities). In August 2014, MTN Zakhele applied to the FSB for a further exemption until the end of the Empowerment Compliance Period at 23:59:59 on 24 November 2016, but was only granted a temporary exemption until 31 March 2015, which exemption was later extended by the FSB to 30 October 2015 to allow MTN Zakhele sufficient time to complete all the necessary processes to list on the BEE Segment of the JSE. Prior to applying for a listing on the JSE, MTN Zakhele explored other alternatives to enable MTN Zakhele Shareholders to continue trading their MTN Zakhele Shares in a manner that is safe, secure and accessible. MTN Zakhele engaged the JSE on the making of necessary amendments to the JSE Listing Requirements and JSE Equities Rules and Directives as it relates to the BEE Segment to accommodate the listing of shares in empowerment structures similar to that of MTN Zakhele. Furthermore, consequential amendments were also required to be made to the Strate Rules and Directives to align those with the amendments adopted by the JSE. The amendments to the JSE Listings Requirements and the JSE Equities Rules and Directives were gazetted on 3 July 2015 and the amendments to the Strate Rules and Directives were gazetted on 7 August 2015, which has enabled MTN Zakhele to apply for the BEE Listing. The most significant aspect of the aforementioned amendments is to enable the listing of the MTN Zakhele Shares as Asset Back Securities on the BEE Segment (thus constituting BEE Securities) pursuant to the principle of BEE Verification (as performed by a BEE Verification Agent), rather than pursuant to the existing multi-party agreement referred to in the JSE Listings Requirements as a BEE Contract. MTN Zakhele believes that the use of a BEE Verification Agent has the effect of simplifying the custody and administration regime for the majority of MTN Zakhele Shareholders by removing the responsibility for conducting BEE Verification in respect of each buyer or transferee from the JSE Members, CSDPs and other Market Participants, and making that process the responsibility of the issuer of the BEE Securities (which it may do it self or through an agent, such as the BEE Verification Agent). In order to facilitate the BEE Listing, MTN Zakhele has changed its own systems, processes and documentary requirements to enable MTN Zakhele Shareholders to access trading in a JSE environment, whilst retaining the ability of MTN Zakhele Shareholders to place their buy or sell orders through the call centre and website operated by the Trading Entity. 1.3 Rationale for the BEE Listing The main rationale for implementing the BEE Listing is to provide the MTN Zakhele Shareholders with regulatory certainty regarding their ability to continue trading in MTN Zakhele Shares during the Empowerment Compliance Period and thereafter. As a result of regulatory changes implemented by the FSB in 2014, it will no longer be possible to continue trading MTN Zakhele Shares on the OTC trading platform without seeking an exchange licence. 12

15 The BEE Listing will provide the MTN Zakhele Shareholders with the following main additional advantages: an anticipated enhanced liquidity in comparison with the OTC trading platform due to the wider access buyers and sellers will have to professional broking services of JSE Members; easier price discovery as JSE prices are published in most major print and electronic financial publications; increased investor protection as a result of: the JSE being a regulated market; the segregation of duties between order taking, matching, settlement and custody of securities and cash; monitoring of insider trading and price manipulation; and monitoring of false and misleading reporting. Certain key additional consequences of the BEE Listing to bear in mind include: the incremental once-off and ongoing costs that will be incurred by MTN Zakhele in respect of the implementation and maintenance of the BEE Listing (refer to paragraph 14 for estimated costs of listing); MTN Zakhele being required in terms of the JSE Listings Requirements to indemnify the JSE and certain Market Participants; the Bulk Dematerialised Shareholders will, unless and until they take steps to transfer their MTN Zakhele Shares into their own name, have to obtain letters of representation from the Custody Entity (or such other Nominee/custodian which holds their Uncertificated MTN Zakhele Shares) if they wish to attend and vote in respect of their MTN Zakhele Shares at general meetings of MTN Zakhele. Having regard to this, MTN Zakhele will procure that the Custody Entity will be available at all general meetings of MTN Zakhele to issue such letters of representation immediately prior to the meetings so long as the MTN Zakhele Shares are held by the Custody Entity as the registered holder, on behalf of the relevant Bulk Dematerialised Shareholders; it will be necessary for any MTN Zakhele Shareholder who wishes to buy, sell, otherwise transfer or receive transfer of MTN Zakhele Shares to complete the BEE Verification process and become a Verified Shareholder. The manner of BEE Verification will depend on whether the relevant person wishes to use the MTN Zakhele Independent Trading Process (in which case relevant Market Participants will need to be appointed, such as a JSE member and a custodian to provide custody services), the MTN Zakhele Facilitated Trading Process or the MTN Zakhele Limited Transfers Process. Where a Verified Shareholder wishes to buy, sell, otherwise transfer or receive transfer of MTN Zakhele shares by way of an Off Market Transfer, they must do so in terms of the MTN Zakhele Limited Transfers Process; and where Market Participants are appointed by a Verified Shareholder, they will levy charges which the Verified Shareholder will be liable for. 1.4 Bulk Dematerialisation At present, in terms of the Relationship Agreement, all MTN Zakhele Shares are required to be held as Certificated MTN Zakhele Shares, the share certificates in respect of which are required to be held in safe custody with the Custodian. On 29 September 2015, MTN Zakhele Shareholders approved the necessary special and ordinary resolutions to make the necessary amendments to the MTN Zakhele MOI and the Relationship Agreement in order for MTN Zakhele to be authorised to implement the Bulk Dematerialisation, as the JSE does not permit trading in securities which are in certificated form. In order to make the MTN Zakhele Shares easily accessible for trading in the JSE environment, they are required to be held as Uncertificated MTN Zakhele Shares. Pursuant to the approval of the aforementioned resolutions, the Bulk Dematerialised Shareholders have agreed that they will be bound by the provisions of the Strate Rules and Directives in respect of their Bulk Dematerialisation Shares. MTN Zakhele Shareholders who wish to continue holding their MTN Zakhele Shares as Certificated MTN Zakhele Shares may elect to do so until the Election End Date, in which case such MTN Zakhele Shares will not be subject to the Bulk Dematerialisation. The Election Shareholders will, unless and until they take steps to dematerialise their MTN Zakhele Shares, be entitled to attend and vote (whether in person or by proxy) in respect of their MTN Zakhele Shares at general meetings of MTN Zakhele. 13