MTN Group is making “great progress” with Nigerian authorities in talks about US$10.1-billion in claims, encouraging Africa’s largest wireless carrier that it can settle the long-running dispute out of court.
The South African company is in ongoing discussions with Nigeria’s central bank and other institutions and is “narrowing down what the key issues are”, CEO Rob Shuter said in an interview in Cape Town on Tuesday. MTN’s strategy is twofold: seek legal action while simultaneously looking for an amicable resolution, he said.
“We would like a resolution out of court and with normal engagements as that would be faster than a court process,” he said.
Shuter’s comments indicate the two sides could be nearing a deal to resolve the dispute, which has been running since the central bank accused MTN in late August of illegally repatriating $8.1-billion from the country. That was followed by a secondary allegation that the Johannesburg-based operator owed $2-billion in back taxes, a matter set for a court hearing early next month.
MTN’s shares rose 1.5% to R81.11 after Shuter’s comments, paring the decline since the crisis erupted to 25%.
The impasse has at least temporarily derailed MTN’s plans to sell stock in its Nigeria unit in Lagos, and that’s contributed to the share price drop, according to Shuter. “A resolution will help to get the listing on the way,” he said at a telecommunications conference.
Listing in Lagos
MTN pledged to list in Lagos as part of a settlement of an earlier fine for missing a deadline to disconnect customers without proper registration. The stock is down by more than 50% since the start of that first dispute in 2015, which also led to an overhaul of management and Shuter’s arrival from Vodafone Group.
Earlier on Tuesday, Shuter indicated that he had no intention of walking away from Nigeria, announcing plans to seek a mobile banking licence in the country. Africa’s most populous nation is MTN’s biggest market with more than 64 million customers, and the company reported a margin of 43% on its Nigerian earnings before interest, taxes, depreciation and amortisation in the third quarter. — (c) 2018 Bloomberg LP