11. Business combinations and disposals
11.1 Subsidiaries disposed of in the current year
11.1.1 BCX ICT Services Limited (‘Nigeria’)
 

BCX ICT Services Limited (‘Nigeria’), a 100% subsidiary of Business Connexion International Group Holding Proprietary Limited, was sold for a purchase consideration of USD 640 599.70 (approximately R10 million). The effective date of sale is 31 January 2020.

The net cash flows attributable to the operating, investing and financing activities of discontinued operations: 2020 
Rm 		  
Net assets disposed of 26   
Remeasurement (16)  
Net asset value 10   
Consideration 10   
Profit on disposal –   
FCTR – Investment in foreign operation (91)  
FCTR – Reclassified from equity to profit or loss 41   
Net loss on sale (50)  
11.1.2 BCX Tanzania Limited (‘Tanzania’)
 

Business Connexion Tanzania Limited (‘Tanzania’) is a subsidiary of BCX (Pty) Ltd. The subsidiary was sold for a purchase consideration of USD 1 000 000 (approximately R15 million). The effective date of the sale is 1 September 2019.

The net cash flows attributable to the operating, investing and financing activities of discontinued operations: 2020 
Rm 		  
Net assets disposed of 39   
Remeasurement (15)  
Non-controlling interest (9)  
Net asset value 15   
Consideration 15   
Profit on disposal –   
FCTR – Investment in foreign operation (9)  
FCTR – Reclassified from equity to profit or loss 14   
Net gain on sale 5   
11.2 Associates disposed of in the current year
 

Smart Office Connexion Group Holdings (Pty) Ltd (‘SOX’)

In May 2019, an agreement was entered into to dispose of BCX’s interest in SOX. The effective date of the disposal was 13 September 2019, being the date that all conditions precedent were met. The proceeds on disposal were received on 18 September 2019. The consolidated profit on disposal was calculated as follows:

  2020 
Rm 		  
Carrying amount of the investment 200   
BCX equity accounted earnings for the period ended 30 September 2019 10   
Proceeds on sale (219)  
Profit on disposal 9   
11.3 Acquisition of non-controlling interest in the current year
 

Yellow Pages (Pty) Ltd minority interest buy-out

On 20 March 2019, the Telkom Board approved the acquisition of the minority shareholding and certain intangible assets in Yellow Pages (Pty) Ltd. In May 2019, the parties to the transaction, Telkom SA SOC Limited, Trumancon Holdings (Pty) Ltd and Lourie Trade and Invest (Pty) Ltd, Applemint Properties 117 (RF) (Pty) Ltd and Yellow Pages, signed the sale of shares agreement.

During August 2019, the transaction was concluded. Telkom acquired the remaining 35.1% of Yellow Pages resulting in Telkom holding 100% in Yellow Pages. The total consideration of R210.6 million was attributed as follows:

  • R159.4 million to the acquisition of the 35.1% non-controlling interest
  • R51.2 million to the acquisition of an intangible asset

The share and intangible asset purchase transaction was accounted for as a step acquisition in line with the requirements of IFRS 10 Consolidated Financial Statements and IAS 38 Intangible Assets, respectively.

The step acquisition resulted in the Group increasing its share in the subsidiary from 64.9% to 100%.