Telkom AR front.qxp

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Telkom Annual Report 2009
Notes to the annual financial statements (continued)
for the three years ended March 31, 2009
23. INTEREST-BEARING DEBT (continued)
Local bonds
The local Telkom bonds are unsecured, but a Side letter to the Subscription
Agreement (as amended) of the TL20 bond contains a number of restrictive
covenants which, if not met, could result in the early redemption of the loan.
The local bonds limit Telkom’s ability to create encumbrances on revenue or
assets, and secure any indebtedness without securing the outstanding bonds
equally and rateably with such indebtedness. The term loan agreements
limit Telkom’s ability to encumber, cede, assign, sell or otherwise dispose
of a material portion of its assets without prior written consent of the Lenders,
which will not be unreasonably withheld. The syndicated loan agreement
contains restrictive covenants as well as restrictions on encumbrances,
disposals, Group guarantees and Group loans.
2007 2008 2009
Rm Rm Rm
Commercial paper bills
Rate p.a., nominal value
2009, 11.44% (2008: 11.71%; 2007: 9.04%), R5,559 million
(2008: R4,383 million; 2007: R1,350 million)
1,339 4,201 5,476
(b) Foreign debt
Maturity, rate p.a., nominal value
Euro: 2010 – 2025, 0.10% – 0.14% (2008: 0.10% – 0.14%;
2007: 0.10% – 0.14%), e11 million (2008: e11 million;
2007: e11 million)
106 140 138
(c) Finance leases
The finance leases are secured by buildings with a carrying value of
R152 million (2008: R174 million; 2007: R197 million) and office
equipment with a book value of R6 million (2008: R14 million;
2007: R6 million) (refer to note 9). These amounts are repayable
within periods ranging from 1 to 11 years. Interest rates vary
between 13.43% and 37.78%.
852 857 984
Included in non-current and current debt is:
Debt guaranteed by the South African Government 4,537 140 138
The Company may issue or re-issue locally registered debt instruments in terms of the Post Office Amendment Act 85 of 1991. The
borrowing powers of the Company are set out as per note 19.
Repayments/refinancing of current portion of interest-bearing debt
The Company issued new local bonds, the TL12 and TL15 with a nominal value of R1,060 million and R1,160 million respectively and
entered into a syndicated loan agreement with a nominal value of R4,100 million during the current year. Commercial Paper Bills with a
nominal value of R11,025 million were issued and Commercial Paper debt with a nominal value of R9,849 million was repaid during the
current year.
The R7,559 million nominal value of current portion of interest-bearing debt as at March 31, 2009 is expected to be repaid/refinanced
from proceeds of the Vodacom sale.
Management believes that sufficient funding facilities will be available at the date of repayment/refinancing.