MTN Group to sell $245m-worth shares of Nigerian subsidiary

-

 

South Africa-based MTN Group has announced plans to sell 575 million shares of its most profitable subsidiary MTN Nigeria, which went public in Lagos in 2019.

“Today we announce our intention to proceed with a public offer for sale of up to 575 million shares in MTN Nigeria, by way of a bookbuild to institutional investors and fixed price to retail investors,” the company said in a notice filed with the Nigerian Stock Exchange.The offer is anticipated to open in November 2021 with a bookbuild to institutional investors, after which a fixed price is expected to be announced for retail investors also in November 2021. The offer is expected to close in December 2021.”The transaction will see MTN Group rake in proceeds of about ₦101 billion ($245 million), based on MTN Nigeria’s (MTNN) current share price of ₦175.60. Hours after the announcement, the stock rose around 8% to ₦191.


A Bit of History

The planned sell-off is part of a broader intention, announced by MTN Group earlier, to sell down 14% of its current shareholding in the Nigerian unit. That will see its holdings in MTNN reduce from 76% to 62%.

While MTN Nigeria is the group’s largest and most profitable subsidiary, the telecom giant has had to deal with a number of billion-dollar disputes with the Nigerian government as well as faced significant macroeconomic challenges. Last year, the Johannesburg-based group was unable to repatriate its $280 million dividend from its Nigerian subsidiary due to the challenges of securing foreign currency, amid the country’s forex liquidity crisis.The share sale thus raises questions about the group’s intentions as it appears to be a gradual exit from the Nigerian market due to a lack of confidence. Although the divestment helps the South African giant slightly reduce its exposure to headwinds in the Nigerian economy, the sell-down does not signal an exit from Nigeria, according to Ayobami Omole, a Lagos-based telecom analyst at Tellimer.

“Since its 2019 listing by introduction, the group has planned to sell part of its stake but held on due to market conditions,” Omole told TechCabal. “The sale is part of its asset realisation programme (ARP) meant to simplify its portfolio, focus on its pan-Africa strategy, and free up capital for improved allocation.”

Between January and September 2021, MTN Group saw its revenue grow to $8.2 billion, driven by success in some of its main markets, including Nigeria. 

Despite the domestic challenges, MTN Nigeria has shown resilience. Within the same period, the local unit grew its profit after tax by 53% to ₦220 billion ($385 million). 

“MTN Nigeria remains an important part of the Group and its fundamentals remain solid,” Omole said, adding that the share sale “gives local retail and institutional investors an opportunity to tap into MTN Nigeria’s growth.”

As part of its ARP, MTN Group is in the process of finalising a sale-and-leaseback of its South African telecom mast portfolio as well as list shares in the Uganda operation in Kampala.

The company recently raked in some proceeds from the initial public offering (IPO) of telecom infrastructure company, IHS Towers, in New York last month.



Comments

Post a Comment

Message Sent

Popular posts from this blog

Meet the world's hottest transgender - Amiyah Scott

-
Image
Yep, all that used to be male. Her name is Amiyah Scott, but she was born ‘Arthur Scott’ in New York in 1988. She's a transgender model and make-up artist. Arthur started the process of turning into a woman when he was 17. He got breast augmentation, booty shots, light filler in the cheeks etc etc.  by linda ikeji       
Read more

Man shot dead by police officer who tried to jump fuel queue in Lagos; police identifies officer responsible

-
Image
  A police officer has gunned down a Lagos resident who prevented him from jumping the queue to buy fuel at a Nigerian National Petroleum Company Limited (NNPCL) filling station at Obalende in the Ikoyi area of Lagos State.    Toheeb Eniafe was in the queue to get petrol on Wednesday evening, May 1, when two men, said to be police officers, attempted to drive into the station to buy petrol even though they were not in the queue to get the product.  This attempt by the police officers to jump the queue was met with stiff resistance from people in the queue who had been waiting for hours.   Eniafe was at the forefront of the resistance, telling the men to join the queue like everyone else.   This degenerated into a physical fight and one of the men shot Eniafe before fleeing the scene.  An angry mob was said to have chased and caught up with one of the officers but he later escaped after firing shots in the air.  On Thursday, May 2, the La...
Read more

Ugandan President Museveni claims IMF, World Bank and Western countries purposely keep African countries in perpetual poverty (video)

-
Image
President Yoweri Museveni of Uganda has claimed that the West and various international monetary lenders keep Africa in continuous poverty. Speaking at the World Bank’s International Development Association summit for African Heads of state, held in Nairobi, Kenya, Museveni took a bold swipe at world leaders saying that most of Africa’s problems predicted over 60 years ago were a result of philosophical, ideological, and strategic economic mistakes. He claimed that a fundamental African problem is that aid from the World Bank and other Western bodies was majorly for profiteering. “The crisis which is in Africa today is because of philosophical, ideological, and strategic economic mistakes which we have been talking about since the 1960s. It is not an accident when you see the crisis in many African countries, the collapse of States. We predicted this in the 1960s – philosophical, ideological, and strategic mistakes. I don’t have time to amplify each one but I was very happy to hear the...
Read more