MTN Nigeria is exploring other means of availing the public of the benefits of owning its shares outside of listing on the Nigerian Stock Exchange, its Chief Financial Officer Ralph Mupita has said.
The new share unbundling idea is a work in progress, Mupita said.
“The decision isn’t final.” he declared.
The MTN Group Limited is facing a combined $10 billion in claims from authorities in Nigeria and may no longer seek to raise capital through an initial public offering on the the Nigerian Stock Exchange (NSE), the CFO told Bloomberg in an interview yesterday in South Africa.
The telco’s decision to reconsider listing its shares in the Nigerian Capital Market, through an Initial Public Offering (IPO), is a direct fallout of its lingering disputes with the Nigerian authorities (its biggest market) that wiped out more than a third of the company’s market value over three weeks. MTN pledged to list the shares after being fined $1 billion for not disconnecting SIM cards two years ago.
Mupita admitted that “the IPO type of listing has become challenging under current market conditions, we are exploring other options. The Nigerian business would not get fair value under current market conditions.” A listing by introduction is the simplest way forward, he statde.
Mupita said MTN could complete the listing by the end of this year or first quarter of 2019, saying this is irrespective of the dispute with the Central Bank of Nigeria (CBN) over the repatriation of $8.1 billion out of Nigeria and a separate tussle over $2 billion in back taxes.
In his words: “We have sought legal protection for our Nigerian business and a judge has been appointed for upcoming hearings.”
Already, the CBN last week said it is considering new information provided by MTN and four banks into the outflows and that it expects to resolve the matter soon.
In the weeks after Nigerian authorities challenged the transfer of funds, MTN plunged 35 per cent, but the stock has since recovered about half of that drop, a development the MTN CFO admitted cost its “shareholders $5.5 billion,” MTN’s investor base is about 44 per cent South African. Other major shareholders are based in the U.S., the U.K., Europe and the Middle East.
Notwithstanding the turbulence by the telco, 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 for foreign companies,” Mupita said.
Nigerian authorities have come under criticism following an impasse with MTN and lenders including Citigroup Inc., Standard Chartered Plc, Standard Bank Group Limited. and Lagos-based Diamond Bank Plc that threatened to spook investors.
There has been mixed feeling on how the Nigerian authority has handled the MTN saga so far. “Investors are getting very nervous and the last thing Nigeria needs is for investors to be nervous,” the Chief Executive Officer, Financial Derivatives Company, Bismarck Rewane, said, stressing that government should resolve the issue with MTN “as quickly as possible.