MTN Zakhele (RF) Limited Over the Counter Trading in MTN Zakhele Shares starts on 25 November 2013 MTN Zakhele Share Trading Platform Information Booklet November 2013
Contents 1. History of MTN Zakhele 2. MTN Zakhele Share Trading Platform 3. Register to Trade 4. Trading (Buying and Selling) In MTN Zakhele Shares 5. Understanding the MTN Zakhele financial statements 6. Frequently Asked Questions 7. MTN Zakhele Shareholder Services Contact details 02 03 03 07 09 11 16 MTN Zakhele owns about 4% of MTN Group Limited (MTN). 01
1. History of MTN Zakhele 2. MTN Zakhele Share Trading Platform MTN Zakhele is to date South Africa s largest empowerment scheme in the telecommunications industry. The R8.1 billion MTN Zakhele transaction was concluded in 2010 as part of MTN s ongoing efforts to further its BBBEE objectives in South Africa. MTN Zakhele owns about 4% of MTN Group Limited. In 2010, an invitation was issued to the black public (individuals and groups) to participate in the growth of MTN through subscribing for MTN Zakhele shares. Over 120 000 black investors became shareholders of MTN Zakhele MTN Zakhele continues to grow The MTN share price has performed strongly since MTN Zakhele first purchased MTN shares in November 2010. The MTN share price has increased from R117 to R196 between August 2010 and September 2013 (68% increase). MTN Zakhele has received meaningful dividends from MTN, which have allowed the scheme to settle some of its debt obligations sooner than anticipated. This has resulted in substantial growth in the value of the MTN Zakhele scheme. Restricted Trading in MTN Zakhele shares will start on 25 November 2013 following expiry of the three year Minimum Investment Period. MTN Zakhele shareholders will from 25 November be able to sell their MTN Zakhele shares to eligible buyers, or buy more shares. These buy and sell trades can be made using the MTN Zakhele Over The Counter (OTC) Trading Platform established specifically for the purpose of trading in MTN Zakhele shares. 3. Register to Trade In order to sell or buy MTN Zakhele shares, using the MTN Zakhele Trading Platform you need to register. The MTN Zakhele Share Trading Platform is a facility to enable the buying and selling of MTN Zakhele shares between willing buyers and willing sellers. You should be cautious of buying or selling MTN Zakhele shares in any other way, as registration of such a trade may be declined. 3.1. Registration of Existing MTN Zakhele shareholders who are Black People If you have access to the internet, please go to www.mtnz.co.za, go to REGISTER and follow the simple registration process. If you don t have access to the internet, phone the call centre on 083 123 6869 and an agent will assist you. 02 03
To complete the registration process, you need to have the following: South African Identity (ID) number Your Cellphone You need to ensure your personal details are up to date Once you have your valid South African ID number, cellphone number and all your details are up to date, you may follow the following process to register. Call Centre Call the Call Centre and ask to Register Provide your ID number to the agent A One Time Pin (OTP) will be sent to your cellphone, provide the OTP to the agent Verify / confirm your details: Full name, cellphone number, address, bank details If all your details are correct, set up a security question (you can choose out of a possible 6 questions) and answer Confirm acceptance of the trading terms and conditions. A system generated password will be sent to your cellphone. Website Click Register Enter your ID number You will need your password ONLY to access the trading platform on the website (www.mtnz.co.za). You do not need a password to trade on the Call centre, you only need an OTP, which will be sent to you each time you trade. DO NOT SHARE YOUR PASSWORD WITH ANYONE, INCLUDING A CALL CENTRE AGENT. A trading account is now open for you to trade. Proceed to login. A One Time Pin (OTP) will be sent to your cellphone. Enter OTP Verify /confirm details If all your details are correct, set up a security question (you can choose out of a possible 6 questions) and answer Confirm acceptance of trading terms and conditions. Create a password on the website. a) If your details have not changed, registration is simple. Verify your details and follow the Registration Process outlined above b) If your personal details (including your cellphone number) have changed or are incorrect If any of your existing personal details have changed or are incorrect, you will need to complete a Change of Details Form, which can be downloaded from the website www mtnz.co.za. You may also call the Call Centre and ask an agent to e-mail, post or fax the form to you. The Change of Details Form must be accompanied by the following supporting documents for details which have changed: Certified copy of South African ID Document Bank statement not older than 3 months (not internet statements) stamped by your Bank OR a signed and stamped letter from your bank confirming your banking details Original or certified copy of proof of residence Once your updated information has been received and verified, you will receive an SMS inviting you to register on the MTN Zakhele Share Trading Platform through the website or Call Centre. c) Registration of minors The registration process for minors is only available through the Call Centre; and Minors must assisted by a parent or guardian and additional documents are required. 04 05
4. Trading (Buying and Selling) in MTN Zakhele Shares 3.2 Registration of Existing MTN Zakhele shareholders that are Black Groups All existing MTN Zakhele Black Group shareholders are required to first update their details, before registering to trade on the MTN Zakhele Share Trading Platform, by completing a Pre-Registration Form. Pre-Registration Forms to update your details can be downloaded at: www.mtnz.co.za. Black Groups include companies, close corporations, stokvels etc. 3.3 New Applicants who want to become MTN Zakhele shareholders If you are not currently an MTN Zakhele shareholder and you wish to buy MTN Zakhele shares: You need to complete an Application Form to apply to become a new MTN Zakhele shareholder. The Application Form may be downloaded on the website, www.mtnz.co.za or you can call the Call Centre on 083 123 6869 and it will be emailed, posted or faxed to you. Once your application has been approved; you will receive an SMS notifying you that you may register on the MTN Zakhele Share Trading Platform on the website or via the call centre. All supporting documentation to be submitted as specified on the relevant Application Form. You need to have completed the registration process outlined above, in order to start selling or buying MTN Zakhele Shares on the MTN Zakhele Share Trading Platform. You need to have your cellphone, your ID number (individuals) and cellphone and shareholder number (for groups). 4.1. SELLING via the internet or the Call Centre You can sell your shares using the internet www.mtnz.co.za or by calling the Call Centre 083 123 6869. Log in using your ID number (individuals) or shareholder number and authorised representative ID number (groups) or provide same details to the Call Centre agent. Indicate the number of shares you want to sell. Indicate the price at which you wish to sell your shares. How long you want your order to sell to be valid for (maximum 90 days). The default period is 10 days unless you change this when you place your order. Once your shares have been sold you will receive an SMS confirmation. The cash from the sale of your shares will be deposited into your bank account with 5 business days from the date of sale. 06 07
5. Understanding MTN Zakhele Financial Statements 4.2. BUYING via the internet or the Call Centre Before you can buy shares, you need to first deposit money into the MTN Zakhele (RF) Limited bank account. Deposit cash or make an Electronic Funds Transfer (EFT) into the MTN Zakhele bank account. No cheques are allowed. The maximum cash that may be deposited is R24,999. Use your ID number (individuals) or shareholder number (groups) as the reference number in order for the funds to be correctly allocated to your trading account. It can take up to 3 business days for any funds deposited into the MTN Zakhele bank account to reflect in your trading account. You will receive SMS confirmation once funds reflect in your trading account. You can now place your order to buy using the website www.mtnz.co.za or Call Centre as follows: Indicate the number of shares you wish to buy. The price per share you are willing to pay for the shares. How long you want your order to buy to be valid for (maximum of 90 days). The default period is 10 days unless you change this when you place your order. Once your order to buy has been filled you will receive an SMS confirmation. Summarised income statement (As taken from the MTN Zakhele audited financial statements) Unreviewed Audited Audited Six months Year ended Year ended 30 Jun 2012 31 Dec 2012 31 Dec 2012 R 000 R 000 R 000 Other income (1) 379 094 600 644 468 759 Other expenses (5 651) (9 703) (8 622) Operating profit 373 443 590 941 460 137 Finance income 1797 3 490 4 255 Finance cost (2) (49 002) (116 694) (150 090) Gain on remeasurement of the derivative financial assets 66 326 142 841 286 030 Profit before tax 392 654 620 578 600 332 Income tax expense (3) (13 067) (110 200) (41 235) Profit after tax 379 497 510 378 559 097 1. Income Dividends received from MTN. 2. Finance cost Interest and other financing costs paid on the funding received by MTN Zakhele and was used initially to buy the MTN shares. 3. Income tax This is the amount of tax which was paid to the South African Revenue Service (SARS) by MTN Zakhele. 08 09
6. Frequently Asked Questions Summarised statement of financial position (balance sheet) (As taken from the MTN Zakhele audited financial statements) Unreviewed Audited Audited Six months Year ended Year ended 30 Jun 2012 31 Dec 2012 31 Dec 2012 R 000 R 000 R 000 Total assets (4) 10 920 010 600 644 468 759 Less: Total liabilities (5) 2 456 636 (9 703) (8 622) = Total equity (Net Asset Value) (6) 8 463 374 590 941 460 137 Net Asset Value Per Share (R) (7) 104.63 96.69 75.45 I want to become a shareholder in MTN Zakhele. Who qualifies? African, Coloured, Chinese or Indian persons who are natural persons and who are either: (a) citizens of the Republic by birth or descent; (b) citizens of the Republic by naturalisation before 27 April 1994; or (c) citizens of the Republic on or after 27 April 1994 who, but for the Apartheid policy in place prior to that date, would have been entitled to acquire citizenship by naturalisation prior to that date. Black Groups ( Black Groups as defined in the prospectus issued by MTN Zakhele in August 2010) How many more MTN Zakhele shares can I buy? 4. Total Assets All the assets owned by your company, MTN Zakhele. The main assets of MTN Zakhele are the shares it owns in MTN, which equals to about 4% of MTN. 5. Total Liabilities These are the loans and funding arrangements of MTN Zakhele; or money borrowed by or provided to MTN Zakhele to buy shares in MTN. 6. Equity (Net Asset Value) The assets minus the liabilities equals the net asset value or equity of a company. 7. Net Asset Value per Share Net asset value (NAV) per Share is calculated as follows: Net Asset Value divided by the Number of Shares of MTN Zakhele In this case, on 30 June 2013 MTN Zakhele s Net Asset Value per share was: R8 463 374 000 80 888 207 MTN Zakhele shares = R104.63. The NAV per Share is not the price at which MTN Zakhele shares will be bought or sold at. There are many factors which will affect the price of MTN Zakhele shares, including those listed on pages 4 and 5 of this booklet. The initial MTN Zakhele share price will be known on the date on which the MTN Zakhele shares start trading (being bought and sold) on the MTN Zakhele Trading Platform. The MTN Zakhele share price will change regularly even after the establishment of the MTN Zakhele Trading Platform. This is because the price is determined by what sellers and buyers of MTN Zakhele shares are willing to sell their shares at and buy their MTN Zakhele shares for. There is no limit on the amount of MTN Zakhele shares you can buy. However, the Black Share Transfer Committee (known as the BSTC) may investigate or review any trade, for example trades of shares above a certain amount and may refuse to allow certain transfers. The BSTC will only do what is allowed in terms of the Relationship Agreement between MTN Zakhele, MTN and each shareholder of MTN Zakhele, dated 12 July 2010 and the memorandum of incorporation of MTN Zakhele. What are the fees charged and why do I have to pay fees? Both the buyer and the seller must pay a transaction fee. The minimum transaction fee (smallest amount you may have to pay) is R60 or 0.75% of the matched value (whichever is higher). The fees charged are for the management, maintenance and support services related to the MTN Zakhele Share Trading Platform. 10 11
I want to become a shareholder in MTN Zakhele. Who qualifies? African, Coloured, Chinese or Indian persons who are natural persons and who are either: (a) citizens of the Republic by birth or descent; (b) citizens of the Republic by naturalisation before 27 April 1994; or (c) citizens of the Republic on or after 27 April 1994 who, but for the Apartheid policy in place prior to that date, would have been entitled to acquire citizenship by naturalisation prior to that date. Black Groups ( Black Groups as defined in the prospectus issued by MTN Zakhele in August 2010) How many more MTN Zakhele shares can I buy? There is no limit on the amount of MTN Zakhele shares you can buy. However, the Black Share Transfer Committee (known as the BSTC) may investigate or review any trade, for example trades of shares above a certain amount and may refuse to allow certain transfers. The BSTC will only do what is allowed in terms of the Relationship Agreement between MTN Zakhele, MTN and each shareholder of MTN Zakhele, dated 12 July 2010 and the memorandum of incorporation of MTN Zakhele. What are the fees charged and why do I have to pay fees? Both the buyer and the seller must pay a transaction fee. The minimum transaction fee (smallest amount you may have to pay) is R60 or 0.75% of the matched value (whichever is higher). The fees charged are for the management, maintenance and support services related to the MTN Zakhele Share Trading Platform. What are the trading hours? Trading hours are weekdays between 09h00 and 17h00 excluding public holidays. Why is the current market price different from the net asset value per share? This is an open market and the market price is determined by what the sellers and buyers in the market are willing sell their shares at and buy share for, respectively. What price should I trade my shares at? MTN Zakhele and its agents are not registered brokers and cannot provide investment advice. You should seek investment advice from a financial advisor or broker in this regard. We merely facilitate the trading process. However, shareholders have access to the following information on the MTN Zakhele website or via the Call Centre to help with price setting: A history of the last 20 trades and the prices at which the shares were traded. The 5 lowest prices that sellers are prepared to sell their shares at and the number of shares. The 5 highest prices that buyers are prepared to pay for shares and the number of shares. How much Tax will I pay if I buy shares? Buyers will pay Securities Transfer Tax (STT) at 0.25% of the value of the trade before the shares are transferred into your own name, unless the law states that no STT is payable for a particular transaction. This will occur automatically as part of the buying process. 12 13
What are the MTN Zakhele Bank Account details? Account name: MTN ZAKHELE (RF) LIMITED Bank: ABSA Branch Name: Towers North Account No: 4082224549 Branch Code: 632005 I made a deposit into the MTN Zakhele Bank Account. When can I go ahead and buy shares? Deposits take 2 to 3 working days to appear on your trading account cash balance and you will be notified as such via SMS. Once the funds have been allocated to your trading account you will be able to submit your order to buy either via the online trading platform at www.mtnz.co.za or via the call centre on 083 123 6869. If I want to donate or transfer my shares to my dependants, relatives and family; how do I do that? Contact the MTN Zakhele call centre on 083 123 6869, these requests are handled by the transfer secretaries, Link Market Services. What happens if I die? Your estate will be permitted to transfer your MTN Zakhele shares to your heir, provided that your heir is an eligible Black Person, or to sell your MTN Zakhele shares to another eligible Black Person or Black Group. What will be the value of MTN Zakhele shares when trading starts? When trading commences on 25 November 2013, the price of the share will be determined by the market. A market consists of both buyers and sellers who have their own opinions on the future value of the shares. However, MTN Zakhele has asked independent stock market analysts to publish their opinions on the value of MTN Zakhele shares. These valuation reports are available on the MTN Zakhele trading website www.mtnz.co.za. Please note that: these valuations are not the actual share price; these valuations are not the opinion of MTN, MTN Zakhele, their directors, any of their staff, advisers or service providers; the price at which the shares will trade may be lower or higher than the valuations. They may even be much lower or much higher; only eligible Black People and Black Groups are allowed to buy and sell the shares. Because there is a small group of buyers and sellers, this could mean that the price at which the shares trade may also be much lower than the valuations; if you rely on these valuations, you do this at your own risk. MTN, MTN Zakhele, their directors, staff, advisers and service providers will not be legally responsible (liable) for any harm or loss or damage that you or others may suffer because of this. This means that you will have no claim against MTN, MTN Zakhele, their directors, their staff, their advisers and their service providers if you make decisions based on the valuations or if the price of the shares is higher or lower than the valuations. This applies only as far as the law allows. 14 15
7. MTN Zakhele Shareholder Services Contact details Call Centre: 083 123 6869 Fax: 086 674 3260 Shareholder Enquiries Email Address: zakhele@linkmarketservices co.za Trade Support Email Address: support@mtnz.co.za MTN Zakhele Online Trading: www.mtnz.co.za MTN Zakhele Shareholder Services: Link Market Services South Africa Proprietary Limited Physical address: 13th Floor Rennie House Braamfontein, 2001 South Africa Postal address: PO Box 4844, Johannesburg, 2000 16