Shareholders of Telkom are advised that Telkom and KT Corporation (collectively "the Companies") have entered into discussions regarding a potential strategic venture ("Potential Strategic Venture") that would, if implemented, result in KT Corporation acquiring a strategic equity shareholding of 20% in the post-issue ordinary share capital of Telkom (excluding treasury shares reserved for Telkom employees share schemes) ("Potential Equity Investment") and the Companies entering into long-term agreements to formalise the relationship and identified areas of mutual strategic and business cooperation.
Should the Potential Strategic Venture be agreed, Telkom and KT Corporation will implement the Potential Equity Investment by way of a specific issue of new Telkom ordinary shares for cash at an issue price of ZAR36.06 per new Telkom ordinary share.
Shareholders are advised that whilst the discussions between Telkom and KT Corporation are progressing well, there is no certainty at this stage that these discussions will lead to a formal transaction being proposed or concluded. Shareholders are advised to exercise caution when dealing in the Company's securities until a further announcement is made.
Pretoria
14 October 2011
Lead financial advisor and transaction sponsor to Telkom
Deutsche Bank
Co-advisor to Telkom
Deloitte
Legal advisor to Telkom
Eversheds
Communications advisor to Telkom
Capital MCG
Sponsor: UBS