Leading telecoms operator, MTN Group Limited, is reported to be putting all arrangements together to raise about N153bn ($500m) from the sale of shares in its Nigerian business during the first half of this year.
The investment plan, according to Bloomberg, is linked to the terms of a deal struck between the telco and the Nigerian government as part of the agreement reached by the two parties to settle a $1 billion fine imposed on it for regulatory infractions in 2016.
Linking the story to people familiar with the matter, the online news medium hinted that Standard Bank Group Limited and Citigroup Incorporated had been advising Africa’s largest mobile phone company on the disposal of as much as 30 per cent of the Lagos-based unit on the Nigerian Stock Exchange.
According to Bloomberg, the sources pleaded anonymity as the details of the listing had not been made public. Most of the shares will be sold to local institutions and individuals, though foreign investors could be brought in to ensure the process is a success, one of the people said.
“Discussions are ongoing and a final decision hasn’t been made, they said. Spokespeople for MTN and Citigroup in Johannesburg didn’t immediately comment, and Standard Bank didn’t immediately respond to Bloomberg calls seeking comment”, it stated.
It would be recalled that MTN fined $1 billion for missing a deadline to disconnect unregistered subscribers amid a security crackdown and subsequently agreed to list the Nigerian unit as part of a June 2016 agreement to pay the imposed fine
The penalty, originally set at $5.2bn, led to the resignation of the Johannesburg-based company’s then chief executive officer and a slump in the share price that’s yet to be clawed back.
The stock extended gains and traded 4.5 per cent higher at 128.83 rand as of the close in Johannesburg, giving a market value of 243 billion rand ($20bn).
“If successful, the share sale will be the biggest on the Nigerian Stock Exchange after Starcomms Plc, which raised $796m when it listed in 2008, according to data compiled by Bloomberg.
“MTN, Nigeria’s biggest mobile phone company with just over 50 million subscribers as of end September, slumped to a loss in 2016 as it absorbed the financial impact of the fine, though it said last month that it returned to profit the following year.
“Nigeria and other sub-Saharan African governments are trying to gain more from international mobile phone operators taking advantage of rising smartphone use and faster data speeds.
“MTN has also agreed to sell shares in Ghana as one of the conditions of a deal to gain spectrum rights, while Vodacom Group Limited, South Africa’s market leader, was ordered to list 25 per cent of its Tanzanian business last year, raising $213m”, Bloomberg added.
Despite the excitement being generated in the industry by the proposed plan by the telco to get its shares listed on the Nigerian stock market, the Chief Executive Officer, NSE, Mr. Oscar Onyema, was quoted by the media sometimes last month that the Exchange would not comment on the planned listing of MTN as it was not in the right position to speak for the telco.
“MTN has to tell its own story, and not us doing so for it,” Onyema quipped.