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The major hurdle to an upcoming initial public offering (IPO) of MTN Group’s Nigerian unit has been crossed, BusinessDay can disclose.
After three different Emergency General Meetings (EGM), the latest of which was held on Thursday, the group got the nod of various categories of shareholders to proceed for the listing on the Nigerian Stock Exchange (NSE) as soon as mid-2018.
At the Emergency General Meeting, complaints by different categories of shareholders and those of the last group of Nigerian shareholders who own 10 percent of MTN Nigeria referred to as ‘LATE’ shares managed by IBTC, among others were resolved.
The LATE shareholders were said to have complained of not receiving dividends since 2015.
A renowned boardroom guru, Gbenga Oyebode has also been appointed chairman of board committee on MTN floatation, BusinessDay gathered.
Oyebode is the Managing Partner of Aluko & Oyebode a top-tier full-service law firm, since 1993. He is a specialist in corporate commercial work and is particularly knowledgeable with regard to the telecoms market.
The law firm Aluko & Oyebode, provides legal services to local and international clients with over 70 lawyers and up to 150 staff members working out of offices in Nigeria commercial centres of Lagos, Abuja, and Port-Harcourt
Sources familiar with the matter said MTN representatives have been engaging with the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE), on the proposed listing.
When BusinessDay spoke to both the apex regulator and the Self-Regulatory Organisation (SRO), they neither confirmed nor denied such meetings.
“We have been meeting with them since the past two years now. Mind you, what the market wants to see is concrete things on the table not the meetings,” an apex capital market regulatory source said.
MTN agreed to list the Nigerian unit as part of a June 2016 agreement to pay a $1 billion fine for missing a deadline to disconnect unregistered subscribers amid a security crackdown.
The penalty, originally set at $5.2 billion, led to the resignation of the Johannesburg-based company’s then chief executive officer, a first ever full-year loss and a slump in the share price that’s yet to be clawed back.
Africa’s biggest mobile-phone company by subscribers is preparing to raise as much as $500 million from the sale of shares in its Nigerian business during the first half (H1) of the year, fulfilling the terms of the deal.
Working with the valuation derived from emerging market peers, MTN Nigeria may be selling a 5.8 percent stake, when it makes an initial offering this year giving it a market capitalisation of $8.6 billion.
If successful, the Lagos share sale will be the biggest on the NSE after Starcomms Plc, which raised $796 million when it listed in 2008, according to data compiled by BusinessDay.
Standard Bank Group Ltd. and Citigroup Inc. have been advising Africa’s largest mobile-phone company on the disposal.
MTN is Nigeria’s biggest mobile-phone company with just over 50 million subscribers as of end September.
It slumped to a loss in 2016 as it absorbed the financial impact of the fine, though said last month it returned to profit the following year.
MTN is preparing to raise as much as 2 billion cedis ($447 million) through listing 35 percent of the subsidiary on the Ghana Stock Exchange in what will be the largest share sale in that country’s history.
Nigeria and other sub-Saharan African governments are trying to gain more from international mobile-phone operators taking advantage of rising Smartphone use and faster data speeds.
The Group’s share price fell 0.48 percent Monday February 26 2018, to 12,937 rand in Johannesburg, giving it a market capitalisation of 245.08 billion rand ($21 billion), according to Bloomberg data.
Telco’s like MTN are grappling with declining voice revenues as consumers turn to data-based platforms such as WhatsApp to make calls.
In the six months to June 2017, MTN’s voice revenue in South Africa — where SIM-card penetration far exceeds MTN’s other markets — fell 5 percent. But voice revenues in Nigeria and other African markets rose.
IHEANYI NWACHUKWU
