MTN’s shares recovered to their best level in more than two weeks on Thursday after authorities in Nigeria said they were working towards an amicable solution to a standoff that has played havoc with the mobile operator’s stock.

The group’s shares, which dipped below R70 for the first time in 12 years earlier this week, closed 6.5% up at R78.17 after Nigeria’s central bank said it was angling towards “an equitable resolution”.

Mergence Investment Managers portfolio manager Peter Takaendesa said that since the market currently valued MTN’s Nigerian business at almost zero, “any news of a potential resolution should be supportive of the share price”.

The central bank told MTN in late August, when MTN’s shares were at R107.34, that it had to return $8.1bn worth of dividends it repatriated “illegally” between 2007 and 2015. It also fined four banks, including Standard Bank’s Nigerian unit, for their role in transferring the funds.

Less than a week after that announcement, Nigeria’s attorney-general told MTN it also owed $2bn in unpaid taxes.

The central bank said late on Wednesday that it was engaging MTN and its four banking partners there, and that the parties had provided “additional information, which is currently being reviewed with a view to arriving at an equitable resolution”.

MTN has said before that the central bank’s claims that its repatriations consisted of illegally converted preference shares were untrue. The dividends it moved out of the country were ordinary dividends, it said.

“We are absolutely convinced that we can make that case,” CEO Rob Shuter told Business Day earlier in September.

The group previously managed to negotiate a better deal after Nigerian authorities fined it $5.2bn in 2015 for failing to disconnect unregistered SIM cards. The fine was later reduced to slightly more than $1bn.

In its statement, the central bank sought to assure investors that “the integrity of the [foreign exchange] regime remains sacrosanct and there shall be no retroactive application of foreign exchange rules and regulations”.

The bank said it welcomed “all legitimate investors” that wanted to take advantage of the “enormous investment opportunities” in Nigeria.

This comes as many analysts say the apparently hostile move against MTN could deter other investors from the country.

Earlier this month, US bank JPMorgan cut its dividend forecast for MTN to account for “a potential cash settlement in 2020”.

It also lowered its December 2019 price target to R86 from R92 to reflect “the incremental Nigerian risk”.

The lender said its recommendation on MTN remained “underweight”, adding that a resolution to the impasse with the central bank and attorney-general was not likely in 2018.

A source close to the matter told Business Day recently the attorney-general’s tax demand was based on rudimentary calculations that wrongly assumed withholding taxes and value-added taxes were applicable to all foreign payments.

A number of other mistaken assumptions were relied upon, the source said.