A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the
holder for a loss it incurs because a specified debtor fails to make payments when due in accordance with the
terms of a debt instrument.
Financial guarantee contracts issued by the Company are initially measured at their fair values and are
subsequently measured at the higher of:
 |
the amount of the obligation under the contract, as determined in accordance with IAS 37 Provisions,
Contingent Liabilities and Contingent Assets; and |
|
the amount initially recognised less, where appropriate, cumulative amortisation recognised in accordance
with IAS 18. |
|
The Company along with other subsidiaries has guaranteed the bonds, revolving credit facilities and general
banking facilities of Mobile Telephone Networks Holdings Proprietary Limited under the terms of the guarantee.
The Company will make payments to reimburse the lenders upon failure of the guaranteed entity to make payments
when due.
| |
Face value |
|
Drawn down balance2 |
|
| |
2015
Rm |
|
2014
Rm |
|
2015
Rm |
|
|
|
| Bond guarantees |
|
|
|
|
|
|
|
|
| Bonds1 and commercial paper |
10 000 |
|
10 000 |
|
1 309 |
|
2 618 |
|
| Syndicated and other loan facilities |
|
|
|
|
|
|
|
|
| ZAR long-term loan |
12 500 |
|
12 500 |
|
11 875 |
|
9 266 |
|
| US$ long-term loan |
15 469 |
|
11 547 |
|
10 364 |
|
– |
|
| General banking facilities |
|
|
|
|
|
|
|
|
| ZAR facilities |
1 750 |
|
1 750 |
|
850 |
|
1 003 |
|
| |
39 719 |
|
35 797 |
|
24 398 |
|
12 887 |
|
| 1 |
These bonds are listed on the Bond Exchange of South Africa. |
| 2 |
Includes interest accrued. |
In addition, the Company has provided unrestricted suretyship with regards to the cash management facility of
Mobile Telephone Networks Holdings Proprietary Limited and suretyship to the amount of R5 850 million (2014:
R5 850 million) with regard to the banking facilities of Mobile Telephone Networks Proprietary Limited, MTN
International (Mauritius) Limited, MTN International Proprietary Limited, Mobile Telephone Networks Holdings
Proprietary Limited and MTN Service Provider Proprietary Limited.
The Company, together with other subsidiaries in the MTN Group, guaranteed senior unsecured notes issued by MTN
(Mauritius) Investment Limited on the Irish Stock Exchange amounting to US$750 million (2014: US$750 million).
A financial liability was initially recognised at the fair value of the guarantee issued. A fee was not charged by the
Company providing the guarantee and therefore the benefit provided by the Company to its subsidiaries was
recognised as a capital contribution.
The Company, together with other subsidiaries in the Group, guaranteed a US$ syndicated loan facility with Citibank
amounting to US$1 billion. During the year, an amount of US$670 million was drawn down by MTN International
(Mauritius) Limited in three tranches. A financial liability was initially recognised at the fair value of the guarantee
issued. A fee was not charged by the Company providing the guarantee and therefore the benefit provided by the
Company to its subsidiaries was recognised as a capital contribution.
The Company’s financial liability relating to financial guarantee contracts amounts to R1 105 million
(2014: R729 million) as at 31 December 2015.
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