Telkom has managed to avert the winding up of Telkom Media by selling its 75% interest in and claims against Telkom Media (Proprietary) Limited to Shenzhen Media South Africa (Proprietary) Limited (“Shenzhen”) for a nominal amount.
On 31 March 2008 Telkom announced its decision to significantly reduce its investment in Telkom Media. Subsequently, various expressions of interest were considered, some of which led to further negotiations with interested parties in a process to find a new majority shareholder for Telkom Media.
However, the process was unsuccessful and on 25 March 2009 Telkom announced that a Telkom Media shareholders’ meeting had been called to approve the winding up of Telkom Media. On 16 April 2009, Telkom Media’s shareholders unanimously voted in favour of a special resolution to wind up Telkom Media.
“In a final attempt to prevent the winding-up of Telkom Media, Telkom launched an accelerated sale process for Telkom Media shareholder’s equity and loan accounts. In terms of this process, Telkom was only prepared to consider unconditional offers backed with adequate financial guarantees. An invitation was sent to parties who, in one way or the other, had expressed an interest in Telkom Media,” said Naas Fourie, Telkom’s Chief of Strategy.
The accelerated process resulted in a Share Sale Agreement being signed with Shenzhen on the evening of 29 April 2009, in terms of which Telkom disposed of its shareholding and loan account in Telkom Media on a “voetstoots” basis. The transaction closed on 4 May 2009.
Fourie added: “There were no conditions precedent included in the Share Sale Agreement which enabled the quick conclusion of the deal. Shenzhen agreed to procure Telkom Media and to change its name within 30 days of closing.”
Regarding the future plans of Telkom Media, Fourie stated that “decisions relating to Telkom Media’s future operations will now be in the hands of Shenzhen as the new majority shareholder”.
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