Africa’s leading cellular telecommunications company and major contributor to telecommunication sector’s GDP in Nigeria, MTN, has confirmed its plan to list on the Nigerian Stock Exchange (NSE) Market in the first half of this year. This is however after a long court case between the Nigeria’s Central bank and MTN which left domestic investors keep cross fingers as to the possibility of a listing by MTN on the NSE.
This was confirmed by Rob Shuter, President and Chief Executive Officer (CEO) of MTN group during an investor update conference call. According to Shuter, “the telco has decided to pursue the listing by means of a listing by introduction, which is phase one of the planned Initial Public Offering (IPO).”
Rob Shuter said, “I think this will enable us to get the company listed whilst the market still digests the implications of what has happened over the last few months.”
He further explained that after the listing by introduction which is to be completed at the first half of 2019, Nigeria investors would have access to shares as part of the second phase of the listing. He said, “It means that we will list the company in the initial phases without any public offer or sell-down or initial public offering.”
It is however expected that in phase 2, MTN will undertake project to increase the Nigerian participation in MTN Nigeria. This they anticipate to target freer float of around 35 percent above the mandatory free float of 20 percent for the main board.
MTN aims to conclude at least the listing by introduction in the first half of 2019, pretty much as soon as it can, and then subject to market conditions, the telco would in phase two do the sell-down.
“We need more companies like MTN to list on the NSE in order to add weight to the Nigerian bourse.” Paul Aluko, research analyst at MBC Securities Ltd. This he believes will not leave the performance of the nation bourse to the direction of a company like Dangote which constitutes about 28 percent of total market cap. “If we have two or more very large stocks like Dangote cement the effect of one going up will neutralize the effect of another going down.” Aluko added.
In the last one year, the share price of MTN dipped significantly by 33 percent on the Johannesburg stock exchange market. Its downward movement was highly affected by sanctions imposed by the CBN over a certificate of capital importation dispute in August 2018 which led to a fall by 34 percent in share value to 7200 Zar in September. The case however was settled with $53 million and withdrawn from the court in January 2019.
Year-to-date analysis shows that share price of MTN on the JSE is down 3.61 percent still struggling to recover from the effect of sanctions from the CBN.
Meanwhile MTN currently face suits from the Attorney General of the federation demanding the sums of N242.24 billion and $1.28 billion representing import duty, withholding tax and value added tax that should have been remitted to the purse of the Federal Government of Nigeria.
MTN however stated that the demand and actions of the Attorney General is illegal and unconstitutional.
David Ibidapo
