Subsequent events

The Prepaid Company Proprietary Limited acquired the remaining 52.63% of the issued share capital of 3G Mobile Proprietary Limited (3G Mobile) for a purchase consideration of R1 billion. The effective date of the transaction was 6 December 2017, on which date the Competition Tribunal approval was granted.

On 2 January 2018 BLT acquired 60% of the issued share capital of Airvantage Proprietary Limited (Airvantage) for a purchase consideration of R151 million. An agreement has been concluded to acquire 60% of the issued share capital of AV Technology Limited, an associate company of Airvantage incorporated in Mauritius, for a purchase consideration of USD6.4 million. The transaction will be completed once approval from the South African Reserve Bank is obtained.

On 9 February 2018, Gold Label Investments Proprietary Limited and 2DFine Investments Mauritius exercised their rights to acquire additional shares in Oxigen Services India and Oxigen Online Services India in proportion to their shareholdings. The total purchase consideration amounted to USD2.9 million.

Acquisition of subsidiaries

Shares in the following subsidiaries were acquired subsequent to period end:

  Effective date
of acquisition
  %
acquired
 
Subsidiaries        
3G Mobile Proprietary Limited 6 December   100%  
  2017      
Supplier and distributor of mobile phones and tablets to major retailers across South Africa and sub-Saharan Africa, and financier of the mobile handset component of post-paid and hybrid contracts        
Airvantage Proprietary Limited 2 January   60%  
  2018      
Owner of a system that offers Mobile Network Operators the ability to advance airtime, data and mobile money to subscribers        

Details of the provisional net assets acquired and the resulting goodwill as at the date of acquisition are as follows:


  3G Mobile
Proprietary
Limited
R'000
  Airvantage
Proprietary
Limited
R'000
 
Total purchase consideration 1 902 208   150 732  
Provisional fair value of net assets acquired 1 657 469   116 198  
Goodwill 244 739   34 534  

   3G Mobile Proprietary Limited     Airvantage Proprietary Limited    
   Provisional 
fair 
value at 
acquisition 
date 
R'000 
   Acquirer's 
provisional 
carrying 
amount on 
acquisition 
date 
R'000 
   Provisional fair 
value at 
acquisition 
date 
R'000 
   Acquirer's 
provisional 
carrying 
amount on 
acquisition 
date 
R'000 
  
Cash and cash equivalents  98 121     98 121     14 570     14 570    
Property, plant and equipment  16 114     16 114     2 939     2 939    
Intangible assets  353 342     –     219 209     7 862    
Investments  106     106     15 944     15 944    
Loans receivable  –     –     7 323     7 323    
Goodwill  479 352     234 613     37 534     3 000    
Inventories  163 233     163 233     –     –    
Receivables  2 557 780     2 557 780     31 336     31 336    
Deferred tax  (73 199)    25 737     (60 138)    (961)   
Borrowings  (1 269 882)    (1 269 882)    –     –    
Payables  (421 859)    (421 859)    (40 519)    (40 519)   
Provisional fair value of subsidiaries acquired  1 903 108     1 403 963     228 198     41 494    
Non-controlling interest        (902)          (16 598)   
Provisional fair value of net assets acquired        1 403 061           24 896    
Total purchase consideration        1 902 208           150 732    
Fair value of previously held interest        (927 402)          –    
Purchase price relating to the initial 47.37% investment in 3G Mobile       895 263           –    
Notional interest on consideration payable        62 764           –    
Purchase price settled        (282 833)          (150 732)   
To be settled        1 650 000           –    

3G Mobile was acquired with the objective of affording the Group access to new channels for the supply and distribution of tier 1 to tier 4 mobile phones and tablets, as well as the ability to finance the mobile handset component of post-paid and hybrid contracts.

In most business acquisitions, there is a part of the cost that is not capable of being attributed in accounting terms to identifiable assets and liabilities acquired and is therefore recognised as goodwill. In the case of the acquisition of 3G Mobile, this goodwill is underpinned by a number of elements, which individually cannot be quantified. Most significant among these is the opportunity that the distribution network and ability to finance assets affords the Group.

Airvantage was acquired with the objective of expanding the Group's service offerings to offer mobile network operators the capability to provide their subscribers with airtime, data and mobile money services through an advance mechanism.

In most business acquisitions, there is a part of the cost that is not capable of being attributed in accounting terms to identifiable assets and liabilities acquired and is therefore recognised as goodwill. In the case of the acquisition of Airvantage, this goodwill is underpinned by a number of elements, which individually cannot be quantified. Most significant among these is the opportunity that the Prepaid Airtime Advance System affords the Group.