The shares of MTN Nigeria Communications Plc will on Thursday May 16 be listed by introduction on the Premium Board of the Nigerian Stock Exchange (NSE).
The listing is anticipated to lift the overall market capitalisation on the NSE and may trigger further primary market activities in the telecom space.
MTN listing by introduction brings forth N1.83trillion ($6billion) worth of equities to the Nigerian Bourse, thereby boosting the value of listed stocks by 17 percent to N12.52trillion, from N10.68 trillion. The Telco eyes debt and equity capital raise after listing.
On the Premium Board, MTN joins other companies like Access Bank Plc, Dangote Cement Plc, FBN Holdings Plc, Lafarge Africa Plc, Seplat Development Company Plc, United Bank for Africa Plc, and Zenith Bank Plc.
Most analysts believe investors will be looking to the company’s free float as this will go a long way in determining the level of activity at the secondary market, going forward.
Companies listed on the Premium Board are required to have a free float of a minimum of 20percent of issued and fully paid up shares or the value of its free float is equal to or above N40 billion on the date the Exchange receives the Issuer’s application to list.
Free float represents the portion of shares of a company that are in the hands of public investors as opposed to locked-in stock held by promoters or controlling-interest investors.
Nigerian investors own 19.4percent of MTN Nigeria, while 78.8percent is owned by South Africa’s MTN Group.
The listing by introduction means that the shares of existing MTN Nigeria shareholders will be listed without an additional public sale of shares. From this point, all MTN Nigeria shareholders will be free to trade their shares on the NSE.
MTN will be listing its 20.35billion units at N90 per share; thereafter the company will also address capital market stakeholders with a Facts Behind the Listing presentation.
“It gives me great pleasure to confirm that the official listing via introduction of MTN’s shares on the NSE will take place on Thursday May 16,” said Ferdi Moolman, CEO of MTN Nigeria.
“We appreciate the continued support afforded us by the government, regulators and people of this great nation. In particular, I would like to thank the staff and management of MTN Nigeria who worked tirelessly to make this day possible. This is just the beginning; we still intend to pursue a future Public Offer giving more Nigerians greater access to the MTN opportunity,” he said.
“As MTN Group we are very pleased that we are taking this first and important step towards increasing the local ownership of the company, and building the equity capital markets in Nigeria,” said MTN Group CFO, Ralph Mupita.
MTN Nigeria recently announced its earnings for the first quarter ended March 31, 2019 recording 13.4percent growth in service revenue.
This was driven by a 12.7percent and 32.4percent rise in voice and data revenue respectively and the addition of 2.1 million active mobile subscribers to the network.
The company announced Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) of N150.4 billion and expanded EBITDA margins to 53.3percent (44.2percent, on an IAS 17 basis) due to growth in revenue and effective cost management.
“While we imagine that listing by introduction should make way for an Initial Public Offering (IPO) later, we highlight the fact that the proposed listing by introduction implies that the company is not raising capital but rather listing the existing shares of current shareholders to provide liquidity and allow for price discovery”, said research analysts at Lagos-based United Capital in their May 14 opinion on MTN listing.
“This implies that new or interested investors can only benefit if current shareholders are willing to exit or sell a portion of their stake.
“While the news of the listing by Introduction may come as a disappointment to market participants who had expected the company to issue new shares, we are of the opinion that this should pave way for an eventual IPO”, the analysts added.
