MTN intensifies plans towards its Nigeria IPO listing by appointing investment firms

South African telecom firm and Africa’s largest telecom company MTN has intensified plans towards its initial public offering (IPO) for its Nigerian unit by appointing investment firms. According to sources familiar with the matter, MTN is looking to start its listing on the Nigerian Stock Exchange in June or July and the price could go for N80 per share.

So far, MTN has appointed Nigerian investment firm Chapel Hill Denham as lead issuing house for the IPO, while South Africa’s Rand Merchant Bank, Renaissance Capital, and Vetiva Capital were picked as joint issuers. These Banks and brokers will work with global co-ordinators Citigroup Inc. and Standard Bank Group Ltd.

Sources familiar with this deal, however, told Nigerian news platform Guardian that MTN is yet to decide what portion of the subsidiary to sell, but it may aim to raise about $400 million, or roughly 10 percent of the stock.

It would be recalled that in 2016, MTN Nigeria settled with Nigerian Communications Commission (NCC) to reduce the fine of N1.04 trillion to N330 billion. The punitive fine was imposed because of the company’s failure to disconnect subscribers who were not adequately registered despite numerous warnings by the regulatory body urging its compliance.

After much deliberation, the fine was significantly reduced with terms mandating the company to list its shares on the Nigerian Stock Exchange (NSE) and offer a formal apology to the government and the citizens within a month of executing the agreement.

When the agreement was reached, the Minister of Communications, Adebayo Shittu, remarked that the settlement was in order to encourage investment in the country.

As a result of this fine by Nigeria, MTN’s biggest market, it recorded a loss of 445 cents per share in 2016, but in 2017 it recorded an increase in its profit.

The Executive Vice Chairman of NCC, Prof Umar Garba Danbatta, announced that MTN has paid a total of N165 billion ($457.7 million) from the N330 billion ($915.4 million) which is 50 percent of the fine slammed on it by NCC.