MTN’s top executive said to plan exit amid Nigeria fine optimism

MTN Group Ltd. Executive Chairman Phuthuma Nhleko, who returned to lead the African wireless company’s negotiations over a record $3.9 billion fine in Nigeria, is moving forward with plans to step down next month, according to a person familiar with the matter, a sign he’s confident a resolution will be reached by then.

Nhleko won’t return to a non-executive role before he comes to an agreement with the Nigerian Attorney General, said the person, who asked not to be identified because the plans are private. The chairman took the executive position on a six-month basis in November in order to “proactively deal” with the Nigerian authorities after Chief Executive Officer Sifiso Dabengwa resigned, Nhleko said at the time.

The plan for an on-time departure provides a ray of clarity, however thin, into a murky, months-long crisis that’s gutted the share value of Johannesburg-based MTN by one-third. Getting it solved has been the top priority of Nhleko, who ran MTN as CEO for almost nine years until 2011. The company proposed a $1.5 billion package last month that included 150 billion naira ($754 million) in cash alongside other incentives. The Nigerian government hasn’t formally responded, though some lawmakers have called for even bigger fines.

MTN spokesman Chris Maroleng didn’t immediately respond to a phone call seeking comment and asked for e-mailed questions. A spokesman for the Nigerian Attorney General said he was preparing a statement, without saying what it would contain.

Unregistered Subscribers

MTN was hit by the penalty in October for missing a government-imposed deadline to disconnect 5.1 million subscribers who had been declared unregistered in the country following a crackdown on security. The fine was later reduced by 25 percent from an original $5.2 billion. While the lower amount equates to almost three times MTN’s 2015 net income, a spokesman for the West African country’s House of Representatives said last month the original levy should be doubled to $10 billion.

MTN shares have declined 33 percent since the penalty was made public on Oct. 26, valuing the company at 236 billion rand ($16 billion). The shares declined 0.6 percent to 127.99 rand as of 3:41 p.m. in Johannesburg on Tuesday.

Nigeria has been fighting an Islamist insurgency led by the Boko Haram group, who have killed at least 20,000 people in their campaign to bring Sharia law to Africa’s largest economy. MTN is Nigeria’s largest mobile-phone company with more than 61 million subscribers, about a third of the population.

– Bloomberg