MTN will not list its subsidiary in Nigeria unless market conditions are sufficiently conducive to an initial public offering, the group’s interim executive chairman, Phuthuma Nhleko, told TechCentral by telephone on Friday.

As part of a settlement with Nigerian authorities, announced on Friday, the South African-headquartered telecommunications group has agreed to list its subsidiary in Nigeria, the largest it owns across 22 markets, on the stock exchange in Lagos.

In terms of the final settlement terms with the Nigerian Communications Commission, which imposed the fine, MTN Nigeria will pay 330bn naira (R25,2bn) for failing to cut off more than 5m unregistered Sim cards, of which it’s already coughed up 50bn naira (see article).

The final settlement, which will be paid off over the next three years, has been reduced by two-thirds from the original US$5,2bn (R79,4bn) fine.

“We have agreed to work expeditiously to try and have the listing [in Nigeria] come to pass,” Nhleko told TechCentral.

Already, about 22% of MTN’s shares in Nigeria trade on an over-the-counter basis. Nhleko said a listing was always an option. “We weren’t not already exploring this. We will now accelerate that, but we will only do it if the market conditions are sufficiently conducive.”

He said it’s too early to talk about the mechanics of the listing, such as how many shares would be available as part of a free float.

“We still have to apply our minds and find the best possible avenue to ensure the most successful listing,” Nhleko said. “We haven’t got to that level of detail, suffice to say we will not lose control [of MTN Nigeria]. We will still have full control of the business.”

Asked if MTN would use funds from other parts of the group, including the approximately US$1bn (R15,2bn) in cash it hopes to repatriate soon from its operation in Iran, Nhleko said this was “absolutely not” under consideration.

“The fine in Nigeria is applied to MTN Nigeria and not to the group. Nigeria is capable, under its own balance sheet, to pay the fine. It’s totally ring-fenced to Nigeria. The MTN group balance sheet will not in any way come into play in terms of servicing the fine.”

Asked what impact knowing the quantum of the fine might have on the group’s dividend policy, Nhleko said that one of two conditions — agreement regarding the fine — had been reached.

“We said that a more restrictive dividend policy has been applied for two reasons. The first one was we were unsighted as to where we would settle on the fine,” he said.

“The second reason was the issue of the availability of foreign exchange in Nigeria, where forex is under pressure because of the very low oil price, on which Nigeria is highly dependent.

“By agreeing this settlement … we have done away with the first reason for taking a more conservative dividend policy. The second reason remains.”

He said MTN is in talks with Nigeria’s banks and its central bank, which he is hopeful will lead to a resolution.

Meanwhile, Nhleko played down fears that MTN would cut its capital expenditure in Nigeria to service the fine.

“If anything, we will significantly increase our capex in Nigeria to ensure we roll out LTE and broadband.”

He said MTN Nigeria intends to invest to ensure its position “remains entrenched” and that it can “continue to serve the market in a rapidly unfolding” telecoms environment.

“There is no intention to pull back or constrain capex [for any of our markets] as a consequence of the fine.”

Nhleko said he is upbeat about appointing a new group CEO for MTN soon, following the sudden resignation last November of Sifiso Dabengwa in the wake of the Nigerian fine.