MTN offers Nigeria $1.5bn to settle record fine

MTN Group has offered to pay $1.5 billion to settle a record $3.9 billion fine slapped on the telco by Nigerian telecoms regulator, NCC, for failing to disconnect 5.1 million unregistered lines suspected to be used to facilitate insurgent activities.

“You know how the unregistered GSM (Global System for Mobile communication) are being used by terrorists,” Nigerian President Muhammadu Buhari said earlier this week.

“That was why NCC (Nigerian Communications Commission) asked the MTN, Glo and the rest of them to register GSM. Unfortunately, MTN was very slow and contributed to the casualties,” Buhari said.

MTN has been in talks with Nigerian authorities to have the $3.9 billion penalty reduced. It made a “good faith” payment of $250 million towards a settlement last month. Now, it has made a written offer to the Nigerian government, comprising cash installments totaling $500 million, bond purchases worth $400 million and $350 million worth of network access.

According to the letter dated Feb. 24, by the company’s lawyer, former U.S. Attorney General Eric Holder, to the Nigerian government, the move “ultimately is in the best interest of the FGN (Federal Government of Nigeria) and MTN Nigeria.”

In its annual results last week, MTN said it had put aside $600 million to cover a deal over the fine.

On Thursday, Nigeria’s Senate Committee on Communications met to discuss the fine, concluding that negotiations with MTN must continue for two more weeks.

MTN’s shares rose 0.12 percent to R14.768 by 2:09p.m. in Johannesburg. It earlier dropped 0.2 percent to 14.715. The fluctuation in price shows uncertainty in the market, as the Nigerian government has not commented on the offer. 

The telco’s shares have declined more than 20 percent since the fine was made public last year.