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06 May 2009

Telkom sells its stake in Telkom Media

Telkom has managed to avert the winding up of Telkom Media by selling its 75% interest in and claims against Telkom Media (Proprietary) Limited to Shenzhen Media South Africa (Proprietary) Limited ("Shenzhen") for a nominal amount.

Last year, on 31 March 2008, Telkom announced its decision to significantly reduce its investment in Telkom Media. Subsequently, various expressions of interest were considered, some of which led to further negotiations with interested parties in a process to find a new majority shareholder for Telkom Media.

However, the process was unsuccessful and on 25 March 2009 Telkom announced that a Telkom Media shareholders' meeting had been called to approve the winding up of Telkom Media. On 16 April 2009, Telkom Media's shareholders unanimously voted in favour of a special resolution to wind up Telkom Media.

"In a final attempt to prevent the winding-up of Telkom Media, Telkom launched an accelerated sale process for Telkom Media shareholder's equity and loan accounts. In terms of this process, Telkom was only prepared to consider unconditional offers backed with adequate financial guarantees. An invitation was sent to parties who, in one way or the other, had expressed an interest in Telkom Media," said Naas Fourie, Telkom's Chief of Strategy.

The accelerated process resulted in a Share Sale Agreement being signed with Shenzhen on the evening of 29 April 2009, in terms of which Telkom disposed of its shareholding and loan account in Telkom Media on a "voetstoots" basis. The transaction closed on 4 May 2009.

Fourie added: "There were no conditions precedent included in the Share Sale Agreement which enabled the quick conclusion of the deal. Shenzhen agreed to procure Telkom Media and to change its name within 30 days of closing."

Regarding the future plans of Telkom Media, Fourie stated that "decisions relating to Telkom Media's future operations will now be in the hands of Shenzhen as the new majority shareholder".

For further enquiries, please contact:

Pynee Chetty

Senior Specialist: Media Relations

Group Communication

Tel:+27 12 642 1716

Mobile: +27 81 389 7874

Email: chettpr2@telkom.co.za

 OR

Leigh-Ann Francis

Specialist: Media Relations

Group Communication

Tel: +27 12 642 1728

Mobile: +27 81 391 4780

Email: francilm@telkom.co.za

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ABOUT TELKOM:

Telkom is a leading communications services provider in South Africa. We had consolidated operating revenue of R16.8 billion and normalised profit after tax of R1, 683 million for the period ended 30 September 2015. Total assets amounted to R41.9 billion and equity attributable to the owners of Telkom to R23.5 billion as of 30 September 2015. The group generated normalised free cash flow of R1.4 billion for the period ended 30 September 2015.

As of 30 September 2015, we had approximately 3.3 million telephone access lines in service and 1,030,441 ports connected via MSAN access. We offer business, residential and payphone customers a wide range of services and products, including:

  • fixed-line retail voice services using PSTN (Public Switched Telephone Network) lines, including ISDN (Integrated Services Digital Network) lines, and the sale of subscription based value-added voice services and calling plans;
  • fixed-line customer premises equipment rental and sales services both voice and data needs and these include PABX, Computers, Routers, Modems, Telephone handsets and other ancillary equipment;
  • interconnection services, including terminating and transiting traffic from South African mobile operators, as well as from international operators and transiting traffic from mobile to international destinations;
  • fixed-line data services, including domestic and international data transmission services, such as point-to-point leased lines, ADSL (Asymmetrical Digital Subscriber Line) services, packet-based services, managed data networking services and internet access and related information technology services;
  • Data Centre Operations includes e-commerce, application service provider, hosting, data storage, e-mail and security services;
  • W-CDMA (Wideband Code Division Multiple Access), a 3G next generation network, including fixed voice services, data services and nomadic voice services;
  • mobile communication services, including voice services, data services and handset sales through our mobile navbar-brand called Telkom Mobile;
  •  information and communication services including cloud services, infrastructure services, workspace services, global service integration management and hardware and network equipment sales locally, in seven African countries, the UK and Dubai through Business Connexion Group; and
  • other services including directory services, through Trudon (Pty) Ltd, wireless data services, through Swiftnet (Pty) Ltd.

Convergence is one of our key strategic initiatives in building a sustainable future for Telkom.  We will lead the provision of converged services in South Africa in support of our mission statement: Seamlessly connecting people to a better life.