Shareholders are referred to the cautionary announcements dated 14 October 2011 and 21 November 2011 regarding a potential strategic venture ("Potential Strategic Venture") between Telkom and KT (collectively "the Companies"). Telkom is pleased to advise shareholders that the Companies have entered into a memorandum of understanding ("MOU") relating to the Potential Strategic Venture.
The MOU provides for an exclusive period of engagement and information exchange to enable the Companies to confirm the areas of mutual strategic and business cooperation and envisaged benefits of the Potential Strategic Venture ("Diagnostic Review").The Diagnostic Review will commence immediately and Telkom will update shareholders in six weeks when the cautionary announcement is renewed.
In addition to the successful completion of the Diagnostic Review, the Potential Strategic Venture will only be proposedto all Telkom shareholders on fulfilment of certain pre-conditions, including:
The Proposed Strategic Venture, if implemented, will not result in a change to Telkom's corporate strategy or in any consequential loss of employment for any of Telkom's existing employees.
Shareholders are advised that discussions regarding the Potential Strategic Venture are still in progress and there is still no certainty that a formal transaction will be proposed or concluded. Accordingly, shareholders are advised to continue exercising caution when trading in the Company's securities until a further announcement is made.
For enquiries:
Telkom
Nicola White (Investor Relations)
Tel: +27 (0)12 311 5720
Pynee Chetty (Media)
Tel: +27 (0)12 311 5247
Pretoria
12 December 2011
Lead financial advisor and transaction sponsor to Telkom
Deutsche Securities SA, a non-bank member of the Deutsche Bank Group
Co-advisor to Telkom
Deloitte
Legal advisor to Telkom
Eversheds
Communications advisor to Telkom
Capital MCG
Sponsor to Telkom
UBS South Africa (Pty) Ltd