MTN to give investors 1 share for every 20 bought

MTN Group will give retail investors one share for every 20 shares they buy and hold for at least 12 months during a share sale this week, according to Karl Toriola, the chief executive officer of the Nigerian unit.

f 575 million shares last week as part of plans to build a local shareholder base of more than 2 million Nigerians through the progressive sale of shares in its Nigerian business over time.

Institutional investors had the first opportunity to participate in the share sale where 10 percent of the 575 million shares on offer.

This week will be the turn of retail investors who have a chance to get one share for every 20 shares they buy.

“Every investor will be given 1 free share for every 20 shares purchased, up to a limit of 250 bonus shares per investor,” Toriola said.

This implies that investors would be getting a five percent bonus on every 20 shares up to the set limit.

“The incentive is open to investors who buy and hold the shares allotted continuously for 12 months from the closing date of the offer because this is a journey that we want to go on together,” Toriola added.

Read also: MTN Nigeria lists N110bn bond on FMDQ Exchange

MTN says it is focused on building the largest retail shareholder base in the country, creating a highly liquid market in MTN Nigeria shares that enables millions more to buy and sell those shares at their leisure.

MTN’s sale of shares in its Nigerian unit to institutional investors had closed last Friday with the telecommunication company recording an oversubscription for the shares offered, according to sources familiar with the transaction

A source at one of the leading pension funds in Nigeria, who confirmed his firm’s participation, said bids were flying in from institutional investors due to the strong fundamentals of MTN Nigeria which only recently received an approval in principle from the Central Bank of Nigeria (CBN) to begin Payment Service Bank operations.

“MTN is one of the most resilient companies in Nigeria and one of the very few trillion-naira revenue companies, yet there is still room for even more growth and investors are simply buying into that promise,” the source at the pension fund said. His firm submitted bids at around N160-N170 per share.

The PSB operations, though unclear when it will finally commence, open up a new income stream for a company already posting in excess of a trillion naira in revenues.

MTN Nigeria is on course to beat last year’s record revenue haul after raking in N1.206 trillion in the first nine months of 2021 which is only N144 billion away from last year’s total revenue of N1.35 trillion, according to data from its financial statement.

The N144 billion MTN Nigeria needs in the fourth quarter to equal 2020’s total revenue is less than half of its quarterly average revenue this year of N340 billion.

The pandemic, which crimped revenues of Nigerian companies last year, seemed to have minimal negative impact on MTN.

MTN received the thumbs up from Nigeria’s capital market regulator, the SEC, this week to sell a portion of its Nigerian unit to local investors in a deal where 575 million shares would be sold.

MTN could raise over N100 billion if the sale is fully subscribed using its current market price of N190 per share but it may come to less given that the sale would likely be at a discount.

Ten percent of the total shares to be sold was offered to institutional investors this week via a bookbuild -a share sale held over a short period of time- while the remaining 90 percent will be sold to retail investors next week.

MTN Nigeria closed at N190 per share Monday, according to data from the NGX.