for the six months ended 30 September 2015
Significant events
Issuing of ordinary shares
On 30 June 2015, Telkom issued 3 979 348 ordinary shares for no consideration. The shares will be allotted and issued in terms of the Telkom Employee Share Plan.
Company Secretary Ms Xoliswa Mpongoshe Makasi resigned from her position as company secretary of Telkom with effect from 30 June 2015. Ms Ephenia Motlhamme was appointed as company secretary to the Group with effect from 1 August 2015.
Results of the Telkom Annual General Meeting regarding director's reappointments
On 26 August 2015, all Board members were re-elected as per the Annual General Meeting ordinary resolutions.
MTN and Telkom Radio Access Network (RAN) assets Transaction
On 7 March 2014, Telkom signed a heads of agreement in terms of which MTN South Africa would take over the financial and operational responsibility for the roll-out and operation of Telkom's RAN. The parties wanted reciprocal roaming agreements to enable customers of either party to roam on each other's network.
On 17 August 2015, Telkom was informed by the Competition Commission that it had recommended to the Competition Tribunal that the transaction be prohibited. The parties have agreed not to proceed with the transaction in its current form.
Acquisition of Business Connexion (BCX)
On 22 May 2014, Telkom had announced its firm intention to make an offer to acquire the entire issued share capital of BCX in a bid to improve performance and restore profitability.
The fair values of the borrowings disclosed above are based on quoted prices or, where such prices are not available, the expected future payments discounted at market interest rates.
Shareholders of BCX approved the acquisition by Telkom at an Ordinary Scheme Meeting held on 11 August 2014. On 4 August 2015, the Competition Tribunal approved the transaction between the companies with conditions. All suspensive conditions were met and the purchase consideration was paid on 25 August 2015.
Voluntary severance packages and voluntary early retirement packages
Telkom announced on 13 July 2015 that the Company had approved the offering of VSP and VERP to non-unionised employees across the company. On 24 July 2015, Telkom announced that it had decided to extend the invitation to all employees, including union members.
The application process was concluded on 17 August 2015. A total of 3108 employees applications were accepted.
Dividends
The Telkom Board declared an ordinary dividend of 215 cents per share and a special dividend of 30 cents per share on 5 June 2015 payable on 20 July 2015 to shareholders registered on 17 July 2015.
Pretoria Head Office
In September 2015, Telkom settled its lease obligation for the buildings with the Telkom Retirement Fund (TRF). Telkom also purchased a previously leased property from the TRF.
Futuremakers
Telkom has implemented an Enterprise and Supplier Development (ESD) programme. As part of the programme, Telkom in partnership with Identity FutureFund Proprietary Limited (IDF), established Futuremakers, in terms of the Department of Trade and Industry's Codes of Good Practice on Black Economic Empowerment 2007, as amended (the Codes) and specifically, in terms of the Information and Technology Charter (the ICT Charter). The Partnership and its initiatives is established in line with Telkom's sustainable strategy of implementing meaningful Black Economic Empowerment (BEE) initiatives.
FutureMakers has received over 300 applications and is directly engaged in supporting 134 black owned SME's, all of which are active in the ICT sector, through access to finance, innovation hubs and business development services.
Launch of redesigned wholesale division
On 13 October 2015 Telkom launched Openserve, the Group's redesigned wholesale and networks division. Openserve will be a distinct business unit within the Telkom Group, which is formed as part of the Group's ongoing efforts to strengthen customer focus through a more flexible and agile operating model. The separation heralds a new era in the Telkom Group as it prepares to welcome a more open access environment and all the opportunities it offers. This move is also in line with Telkom's turnaround strategy to separate its wholesale and retail divisions to facilitate greater focus, accountability and most importantly, customer-centricity.
As a key driver of socio-economic development, Openserve will enable more choice, increased innovation and greater service-provider competition. The result will be increased broadband access. Telkom intends to play a substantial role in lowering the barrier to entry for new players and to increase the competitiveness of smaller players.
Cell C
On 9 November 2015, Telkom announced that it is in discussion regarding a potential transaction to acquire all of the shares of Cell C.