The Public Investment Corp has raised its stake in MTN Group for the second time in as many days, taking advantage of a price that’s close to 10-year lows amid a crisis in Nigeria.
The PIC’s shareholding is almost 26%, Johannesburg-based MTN said in a statement on Thursday. The previous day, Africa’s largest wireless carrier by sales said the stake had increased to about 24%.
“We believe MTN has a strong set of assets and competencies,” Deon Botha, head of corporate affairs, said in e-mailed comments, declining to say more about the PIC’s rational for boosting its stake.
MTN’s share price has plunged by 19% since Nigerian authorities in late August alleged that the company had illegally transferred US$8.1-billion out of the country. The carrier is also on the hook for $2-billion in back taxes in Nigeria, it’s biggest market. However, there are signs that at least the first matter may be resolved, with central bank governor Godwin Emefiele saying last week the two sides are on “the verge” of announcing a deal.
The shares rose 1.5% to R89.73 as of 4.30pm in Johannesburg on Thursday, valuing the company at R169-billion.
“There’s been positive rhetoric on a resolution in Nigeria and so that helps,” said Ruhan du Plessis, an analyst at Avior Capital Markets in Cape Town. “It seems the PIC is comfortable buying into MTN at these levels.”
The PIC is Africa’s largest money manager with more than R2-trillion under management. The Pretoria-based company is state owned and looks after South African government worker pension funds. — Reported by Janice Kew and Loni Prinsloo, (c) 2018 Bloomberg LP