According to the Chief Financial Officer of MTN Group Ltd, Ralph Mupita, the wireless carrier is currently considering dropping its plan to raise capital through an initial public offering (IPO) on the Nigerian Stock Exchange.
Mupita told Bloomberg that the telco giant is considering other options of trading its shares on the local bourse, including listing by introduction, in which existing shares of MTN are listed on the exchange.
Mupita said the new plan became necessary due to current market conditions that may not support the Nigerian business getting a fair value for its shares if an IPO was to take place.
The company’s stock which is traded on the Johannesburg Stock Exchange has plunged in value 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.
MTN is currently seeking board approval to go through with the new plan to list by introduction on NSE.
“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. The simplest way to go forward would be an introduction on the Nigerian Stock Exchange.” Mupita said.
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According to the CFO, the listing of the company in its biggest market could be done by the end of 2018 or first quarter of 2019. The stock of the company tumbled as a result of dispute with Central Bank of Nigeria (CBN) over the repatriation of $8.1 billion out of the country and a clash with the office of the attorney general over $2 billion back in taxes.
However, the company rose 2.01 percent gaining for the seventh time after the company announced that it provided extra information that may lead to an equitable resolution on September 20th. That pared losses to 27 percent since Aug 29th, the day before CBN demanded the company return the money.
During this period, MTN’s shares declined as low as 6,990 ZAr on September 17th and have been recovering since then. Initially, MTN’s listing on the local bourse was part of a settlement with Nigerian Authorities of the fine imposed two years ago over failure to disconnect unregistered SIM cards.
“We have sought legal protection for our Nigerian business and a Judge has been appointed for upcoming hearings,” Mupita said.
Last week, CBN said it is reviewing additional information provided by MTN and the banks into the outflows and that it expects to resolve the matter soon.
