Subject to market conditions, South Africa’s telecoms firm, MTN Group will go ahead with its Initial Public Offering (IPO) listing its Nigerian subsidiary, MTN Nigeria in the Nigerian Stock Exchange (NSE) this year.
Bloomberg had previously reported the Executive Chairman of MTN Group, Phuthuma Nhleko, as saying the company may delay the planned listing until 2018 in order to resolve a regulatory dispute, but a recent PricewaterhouseCoopers (PwC) report indicates the IPO plan might work out this year.
While MTN operates in 22 countries in Africa and the Middle East with more than 200 million users, MTN Nigeria is the Group’s largest and most profitable subsidiary. It is the market leader in fixed and mobile broadband sectors with over 60 million users.
The firm is battling with a fine of $5.2 billion that was reduced to N330 billion.
After the fine was announced in 2015, MTN shares lost its value in Johannesburg, and analysts have said the decision of MTN to list in the NSE was part of agreement the company reached with the Federal Government as a condition for slashing the fine imposed on it by the Nigeria Communications Commission (NCC).
But Nhleko stated at an annual meeting of the World Economic Forum in Davos, Switzerland that the firm has ever wanted to list in the NSE.
“We’ve always intended to list – we have reaffirmed that with the government. Clearly, we can only list when the conditions are conducive,” he said.
TheNewsGuru recalls the fine was imposed on MTN after it was found to have breached the ‘know-your-customer’ rules set by the NCC, and Dino Melaye, the Senator representing Kogi West, had accused the mobile operator of illegally repatriating $14 billion out of Nigeria over ten years.
The PwC report said Nigeria’s economy slowed sharply in 2015 and 2016, primarily due to global fall in crude oil prices but is forecast to return to slow growth in 2017; and Telecoms operators in Nigeria have been under pressure to list on the exchange to widen equity ownership and tame what many consider as undue profit repatriation that is detrimental to the Nigerian economy.
Recently, MTN paid N19 billion ($60 million) for a 2.6 GHz licence auctioned by the NCC in June 2016. It was the only company, which secured approval to take part in the auction. MTN will use the frequencies to expand its LTE network in Nigeria.
MTN, if listed, would become the first major national telecoms company whose shares would be traded on the NSE.