IPO PRESENTATION

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IPO PRESENTATION PORTFOLIO COMMITTEE ON PUBLIC
ENTERPRISES 14 SEPTEMBER 2005
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Telkom IPO key statistics

• R 4.3. Billion raised for the NRF
• 139 257 954 ordinary shares offered
• Issue date 4 March 2005
• Good aftermarket share performance (listed at R
  28 now trading at R 125)
• 220 educational roadshows
• 1 474 501(500 000) individuals and 283 stokvesl
  registered
• 104 379 individuals and 445 stokvels applied
• Successful ESOP and Retail offer

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BACKGROUND
Restructuring of the SA economy
Restructuring of economic sectors
Restructuring of SOEs
SEPs, outright sales, IPO, concessions
Telkom IPO
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Telkom IPO

• Planning

Pre planning
Identifications of roles
Timing ( approximately 1 year)
Listing considerations
Regulatory issues
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Telkom IPO

• Government sale of share to SEP and BEE prior to
  the IPO
• Amendments to the Telecommunication Act
• Regulatory issues
• Market conditions
• Government objectives

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REPORTING LINES
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LISTING CONSIDERATIONS
Advantages Disadvantages
Additional source of optional for the IPO Raises the international profile of the SOE Raises the profile of South African capital markets Assists in future fund raising Additional cost, especially to comply with international accounting and disclosure standards Requires appointment of international advisers, in particular lawyers and investment bankers International advisers are more expensive and are likely to require payment in foreign currency More extensive international roadshow required
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APPOINTMENT OF SERVICE PROVIDERS

• Global coordinators
• Syndicates
• Legal specialists
• Communication specialists
• Advertising agencies
• Event coordinators

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PROJECT TEAM
National Treasury Policy department
Department of trade and industry Government
Communications and Information System The
industry regulator (the regulator) JSE and
NYSE Organised labour
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LESSONS LEARNT

• Planning phase
• Clear government IPO objectives
• Defined and complete regulatory regime and
  industry structure
• More flexible time-table
• Clear communication strategy

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BEE PARTICIPANTS IN THE IPO TRANSACTIONS

• Reasonable work allocation and remuneration
• Meaningful representation and participation in
  IPO structures
• Participation in discussions of key issues
• Maximising skills transfer opportunities

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What next?

• IPOs are one of the options in the Govertment
  strategy, but only in the next 3 years
• Priority is on improving the balance sheet of key
  SOEs and obtain certainty in sectoral policies
  and regulatory environement
• Explore partneships with private sector
• Accelereate the disposal of non-core assets and
  promote Broad-based BEE