Uncertainty Trails MTN Nigeria Listing On NSE

MTN

Lagos, Nigeria, July 9, 2018 – There is an air of doubt over the listing of telecoms giant, MTN Nigeria, on the floor of the Nigerian Stock Exchange (NSE) as there have been serial postponement of dates by the company since it announced the plan for Initial Public Offering (IPO) in June 2016.

Last year, it was gathered that the company would list in May 2018. As the date approached, there was another report by MTN that a new date of June 2018 was fixed. No sooner the announced June date passed than July 15, 2018 became the new expected deal date for many potential Nigerians and the capital market.

While many people were in high expectation, Daily Independent learnt that July 15 date would not be feasible, hence August 2018 is now being cited as a veritable date for the IPO listing.

In the face of all these postponements, it was gathered that an indefinite date before the end of the year is being peddled for the listing.

The development has triggered anxiety for the stock market that is optimistic that MTN Nigeria’s listing its much-anticipated shares on the local bourse would buoy market performance.

Last week, MTN Nigeria’s Initial Public Offering (IPO), Daily Independent gathered, has been set for August as part of MTN’s plans to restructure debts and fund local investments in Nigeria with its local currency.

Recently, a source from MTN Nigeria debunked rumours that the multinational mobile telecommunications company had ever hinted at issuing as much as $500 million-valued shares during the IPO.

The source also said MTN Nigeria Limited has yet to fix a definite date for the IPO, while noting that all information pertaining to that would be made known at the right time.

Meanwhile, MTN Group’s President/CEO, Rob Shuter, last month disclosed that the IPO will happen before the end of the year. He, however, gave no further details about when that will be happening or how much the company hopes to raise.

MTN Nigeria will be worth between N3.2 trillion and N3.9 trillion on the Nigerian Stock Exchange. MTN hopes to raise $400 million from the IPO to pay preference shareholders. The telecoms company will issue about 402 million shares, with one share split into 50 units to create 20 billion shares. MTN had originally planned to list its Nigerian office on the country’s stock exchange last year but delayed the decision due to unfavourable market conditions.

MTN also plans to pay off some of its debts through the IPO.

South Africa’s MTN owns more than 70 percent of MTN Nigeria, which has other 300 existing shareholders.

In all, MTN plans to list its Nigerian unit worth $5.23 billion and will raise fresh funds to reduce debt.

As at March, 2018, MTN shares traded over-the-counter in Nigeria at $13, giving it a market value of $5.23 billion, down from $25 billion in 2015 before a Nigerian government fine.

The company would use the proceeds of the share sale to redeem preference shares issued to existing investors who bought the shares 11 years ago and also cut its dollar exposure.

IPOs dried up in Nigeria after a 2008 crash wiped more than 60 percent off the stock market’s capitalisation. The index has since recovered, gaining 42.3 percent last year and 11 percent so far this year but IPOs have yet to resume.

As Nigeria’s biggest telecommunications provider with over 50 million subscribers, MTN Nigeria in 2015 was slapped with a N1.04 trillion fine by Nigerian Communications Commission (NCC) for failing to disconnect unregistered subscribers on its network before a general deadline. The fine was later reduced to N330 billion in a controversial manner.

The fine contributed to MTN’s debt burden, which had risen from $4.2 billion in 2016 to $4.6 billion in 2017. In response, MTN, whose headquarters is situated in South Africa, has decided to replace its dollar-dominated debts with the local currency of the countries where its different units are situated.

The stock exchange listing of MTN Nigeria will be MTN’s second major listing in its West African offices this year after the Ghana IPO in May. The listing of the IPO, which was worth $754 million, was bigger than Ghana’s previous greatest share sale. The IPO was offered at 4.64 billion shares in the unit, and at 75 pesewas per unit.

It has also announced the same deal in Ivory Coast. However, in its offices in Iran, which represents its second largest market, it has been impossible for MTN to repatriate about 200 million euros ($237 million) after US President Donald Trump pulled out of a nuclear deal with the country and re-instated sanctions on it.

Independent.ng 

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