SENS Note - 14 June 2006

MTN to raise R8bn in bonds for acquisition

MTN to raise R8bn in bonds for acquisition Lesley Stones -------------------------------------------------------------------------------- E-Mail article Print-Friendly Information Technology Editor MTN is planning to raise part of the $5,5bn it needs to take over the pan-African and Middle Eastern cellular operator Investcom by selling bonds worth up to R8bn. It would start selling bonds to South African investors today in a sale led by Deutsche BankÆs South African arm, said finance director Rob Nisbet. Four banks including Deutsche will lend MTN the cash it needs, but Nisbet did not name the other backers. MTN would borrow $3,85bn and issue up to 204-million shares to complete the payment, giving Investcom shareholders up to 13% of MTN. Yields on the benchmark South African government 10-year bond have risen 24 basis points since June 7, the day before the central bank raised interest rates for the first time in almost four years. ôItÆs an interesting choice of timing,ö said Leon Myburgh, a sub-Saharan Africa strategist at Citigroup. ôYou could have got substantially better rates last week.ö Taking over Beirut-based Investcom will give MTN another 4,9-million customers in eight countries, along with licences to operate in two more. Yesterday MTN shareholders approved the reconstitution of its board to better support its international expansion, with moves to appoint experienced personnel able to help develop its business in the Middle East. The new members include Sheikh ARH Sharbatly, a director of Riyad Bank in Saudi Arabia and the Saudi Arabian Refinery Company and chairman of Arabian International Corporation. CEO Phuthuma Nhleko said MTN needed a ôregionalised operational structureö to realise its expansion plan. With Bloomberg.