MTN Nigeria IPO to commence in August
MTN Nigeria’s bid to be listed on the Nigerian stock exchange has been approved to go ahead after weeks of delay by Nigeria’s Securities and Exchange Commission (SEC). MTN Nigeria’s Initial Public Offering (IPO) has been set for August as part of MTN’s plans to restructure debts and fund local investments in Nigeria with its local currency.
According to Business Day News, MTN Nigeria will be worth between 3.2 trillion Naira and 3.9 trillion Naira on the Nigerian Stock Exchange. MTN hopes to raise $400 million from the IPO to pay preference shareholders. The telecoms company will issue about 402 million shares, with one share split into 50 units to create 20 billion shares. MTN had originally planned to list its Nigerian office on the country’s stock exchange last year but delayed the decision due to unfavourable market conditions.
MTN also plans to pay off some of its debts through the IPO. MTN Nigeria is Nigeria’s biggest telecommunications provider with more than 50 million subscribers. In 2015, it was slapped with a $1 billion fine by Nigeria’s communications regulation body for failing to disconnect unregistered subscribers on its network before a general deadline. The fine was later reduced to 330 billion Naira by Nigeria’s Minister for Communication Adebayo Shittu.
The fine contributed to MTN’s debt burden, which had risen from 52 billion rand ($4.2 billion) in 2016 to 57 billion rand ($4.6 billion) in 2017. In response, MTN, whose headquarters is situated in South Africa, has decided to replace its dollar-dominated debts with the local currency of the countries where its different units are situated.
The stock exchange listing of its Nigerian office is MTN’s second major listing in its West African offices this year after the Ghana IPO in May. The listing of the IPO, which was worth $754 million, was bigger than Ghana’s previous greatest share sale. The IPO was offered at 4.64 billion shares in the unit, and at 75 pesewas per unit.
It has also announced the same deal in Ivory Coast. However, in its offices in Iran, which represents its second largest market, it has been impossible for MTN to repatriate about 200 million euros ($237 million) after US president Donald Trump pulled out of a nuclear deal with the country and re-instated sanctions on it.
Investment firms for the issuance include Chapel Hill Denham, the lead issuing house, Rand Merchant Bank, Renaissance Capital and Vetiva Capital.