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.