MTN, Nigeria’s leading telecoms services provider, is set to raise about $500 million from the the sale of its shares through Initial Public Offering (IPO) in the Nigerian Stock Exchnage (NSE) before the first half of this year ends.
The IPO would enable the company fulfil the terms of a pact it had with the telecoms industry authorities to settle a record fine imposed on it in 2016 over SIM registration default and fund its critical infrastructure projects, amongst other investments
It would be recalled that Standard Bank Group Ltd and Citigroup Inc. have been advising Africa’s largest telecommunications services provider on the disposal of as much as 30 per cent of unit on the Nigerian Stock Exchange (NSE).
The details of the transaction have not been made public still. However, industry sources confirmed that discussions were ongoing but that a final decision had not been taken on the plan.
Attempts to get some hints on the planned investment by the telco did not yield any result as its spokespersons and those of Standard Bank and Citigroup in Johannesburg didn’t comment.
MTN agreed to list the Nigerian unit as part of a June 2016 agreement to pay a $1 billion fine for missing a deadline to disconnect unregistered subscribers amid a security crackdown.
The penalty, originally set at $5.2 billion, led to the resignation of the Johannesburg-based company’s then chief executive officer, a first ever full-year loss and a slump in the share price that’s yet to be clawed back.
Meanwhile, the firm’s stock extended gains on Wednesday, and traded 4.5 percent higher at 128.83 rand as of the close in Johannesburg, giving a market value of 243 billion rand ($20 billion).
Analysts have projected that if successful, the NSE share sale would be the biggest on the Nigerian Stock Exchange after Starcomms Plc, which raised $796 million when it listed in 2008.
MTN with over 50 million subscribers as of end September, slumped to a loss in 2016 as it absorbed the financial impact of the fine, though said last month it returned to profit the following year.