SENS Note - 25 May 2009

MTN Group - cautionary announcement

MTN Group Ltd and Bharti Airtel Ltd are currently exploring a potential transaction whereby MTN and its shareholders would acquire, pursuant to a scheme of arrangement, an approximate 36% economic interest in Bharti, of which 25% would be held by MTN with the remainder held directly by MTN shareholders, and Bharti would acquire an approximate 49% shareholding in MTN. Bharti and MTN have agreed to discuss the potential transaction exclusively with one another until 31 July, 2009. The potential transaction between Bharti and MTN would create a leading telecommunication service provider group aligning Bharti's market leading Indian business with MTN`s market leading African and Middle Eastern operations. The potential transaction would also represent a significant development in South-South cooperation between India and South Africa. The broader strategic objective would be to achieve a full merger of MTN and Bharti, as soon as it is practicable to create a leading emerging market telecom operator which today would have combined revenue of over USD 20 billion and a combined customer base of over 200 million. The discussions contemplate that the potential transaction, which would be achieved through a scheme of arrangement, would include the following principal elements: MTN would acquire approximately a 25% post-transaction economic interest in Bharti for an effective consideration of approximately USD 2.9 billion in cash and newly issued shares of MTN equal to approximately 25% of the currently issued share capital of MTN Bharti would acquire approximately 36% of the currently issued share capital of MTN from MTN shareholders for a consideration of ZAR 86.00 in cash and 0.5 newly issued Bharti shares in the form of Global Depository Receipts for every MTN share acquired which, in combination with MTN shares issued in part settlement of MTN's acquisition of approximately a 25% post-transaction economic interest in Bharti, would take Bharti's stake to 49% of the enlarged capital of MTN. Each GDR would be equivalent to one share in Bharti and would be listed on the securities exchange operated by JSE Ltd Bharti would have substantial participatory and governance rights in MTN enabling it to fully consolidate the accounts of MTN MTN's economic interest in Bharti would be equity accounted and would have appropriate representation on the Bharti board

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