MTN Group, facing a combined US$10-billion (about R140-billion) in claims from Nigerian authorities, has said it may no longer seek to raise capital through an initial public offering on the country’s stock exchange.
Africa’s largest mobile phone company is considering other options of trading its shares on the Lagos-based bourse, including a so-called listing by introduction, in which existing shares are listed, chief financial officer Ralph Mupita said in an interview in Johannesburg. MTN’s board still needs to make a final decision, he said.
“The IPO type of listing has become challenging under current market conditions,” Mupita said. “We are exploring other options. The Nigerian business would not get fair value under current market conditions. The simplest way to go forward would be an introduction on the Nigerian Stock Exchange.”
MTN could complete the listing in its biggest market by the end of this year or first quarter of next year, the CFO said. The company’s stock has plunged in the wake of a dispute with the central bank over the repatriation of $8.1-billion out of the country and a separate tussle with the attorney general’s office over $2-billion in back taxes. Listing the business on the local exchange forms part of a settlement two years ago over unregistered Sim cards, when MTN negotiated a $5.2-billion fine down to about $1-billion.
“We have sought legal protection for our Nigerian business and a judge has been appointed for upcoming hearings,” Mupita said. The central bank last week said it is reviewing new information provided by MTN and the banks into the outflows and that it expects to resolve the matter soon.
MTN’s shares pared an earlier gain of as much as 3.7% to trade 2.3% higher at R89.59 as of 3.57pm in Johannesburg on Monday. In the weeks after Nigerian authorities challenged the transfer of funds, MTN plunged 35%, but the stock has since recovered about half of that drop. “That cost our shareholders $5.5-billion,” said Mupita. MTN’s investor base is about 44% South African. Other major shareholders are based in the US, UK, Europe and the Middle East.
MTN still sees a great business case for Nigeria, Africa’s most populous nation, with less than a third of users currently on the Internet, Mupita said.
“We are engaging with authorities and investors and hope to reach a speedy resolution on the matter, to deal with the overhang on our share and the concerns of shareholders about Nigeria’s investment climate,” Mupita said.
Nigerian authorities are changing their tone after coming under criticism that the impasse with MTN and lenders including Citigroup, Standard Chartered, Standard Bank Group and Lagos-based Diamond Bank threatened to spook investors. — (c) 2018 Bloomberg LP