Telkom AR front.qxp

Telkom Annual Report 2009 243
Notes to the consolidated annual financial statements (continued)
for the three years ended March 31, 2009
45. SUBSEQUENT EVENTS
Dividends
The Telkom Board declared an ordinary dividend of 115 cents (2008: 660 cents, 2007: 600 cents) per share and a special dividend
of 260 cents (2008: Nil cents, 2007: 500 cents) per share on June 19, 2009, payable on July 20, 2009 to shareholders registered on
July 17, 2009.
Acquisition of MWEB Africa Limited and majority equity stake in MWEB Namibia (Proprietary) Limited
On November 10, 2008, Telkom International (Proprietary) Limited, a wholly owned subsidiary of Telkom, announced it has entered into
agreements to acquire 100% of MWEB Africa Limited ("MWEB Africa") and 75% of MWEB Namibia (Proprietary) Limited
(“MWEB Namibia”). The purchase price for the MWEB Africa Group including AFSAT and MWEB Namibia is US$55 million
(approximately R498 million) with a deferred payment of US$14.18 million due when the profits of MWEB Group for the year ended
March 31, 2009 are finalised. These shareholdings will be acquired from Multichoice Africa Limited and MIH Holdings Limited
respectively, which are members of the Naspers Limited Group.
MWEB Africa is an internet services provider in sub-Saharan Africa (excluding South Africa) which also provides network access services
in some countries and is headquartered in Mauritius with operations in Namibia, Nigeria, Kenya, Tanzania, Uganda and Zimbabwe, an
agency arrangement in Botswana and distributors in 26 sub-Saharan African countries.
The acquisition of MWEB is part of the Group’s strategy of growing its broadband and solidifying its market position through acquisitions.
Based on an independent valuation, the MWEB Africa Group does not have any significant contingent liabilities at acquisition date.
The only possible contingent liability, the AFSAT bonus scheme, is reasonably quantified and included in the balance sheet of MWEB Africa
Group at March 31, 2009.
The purchase price of US$69.168 million was determined as follows:
• Namibian cash-generating unit for US$1.5 million;
• Mauritian cash-generating unit for US$53.5 million; and
• US$14.18 million deferred until the profits of the MWEB Group for the year ended March 31, 2009 are finalised.
The successful conclusion of the agreements being entered into is subject to conditions precedent, including regulatory approvals being
obtained in certain African jurisdictions.
Subsequent to year end, on April 21, 2009, the conditions precedent to the sale were fulfilled.
The acquisition will have the following effect on the Group’s assets and liabilities on acquisition:
Carrying amounts Fair values
Rm Rm
Fixed assets 43 43
Intangible assets 138 209
Deferred taxation asset 2 2
Cash and cash equivalents 75 75
Trade and other receivables 26 26
Inventory 16 16
Deferred taxation liability (18) (19)
Taxation (4) (4)
Trade and other payables (69) (69)
Fair value of net assets acquired 209 279
Minority interests (2) (2)
Net asset value 207 277
Goodwill on acquisition – 352
Purchase price* – 629
Capitalised transaction costs – 3
Total cash consideration – 632
* Of the R629 million purchase price, R498 million has been settled. The outstanding amount of US$14.18 million (approximately R105 million) is deferred
payment.