MTN looks at ways around Lagos IPO
MTN Group, the wireless carrier facing a combined $10bn in claims from authorities in Nigeria, says it may no longer seek to raise capital through an initial public offering on that country’s stock exchange.
Africa’s largest mobile carrier was considering other ways to have its stock traded in Lagos, including what is known as an introduction, in which existing shares are listed, CFO Ralph Mupita said in an interview in Johannesburg.
MTN’s board still had to make a final decision, he said.
"The IPO type of listing has become challenging under current market conditions," Mupita said. "We are exploring other options. The Nigerian business would not get fair value under current market conditions." A listing by introduction was the simplest way forward, he said.
MTN could complete the listing in its biggest market by the end of this year or first quarter of 2019, the CFO said.
The company’s stock has plunged in the wake of a dispute with the central bank over the repatriation of $8.1bn out of Nigeria and a separate tussle over $2bn in back taxes. Listing the business in Lagos forms part of a settlement two years ago over unregistered SIM cards, when MTN negotiated a $5.2bn fine down to about $1bn.
"We have sought legal protection for our Nigerian business and a judge has been appointed for upcoming hearings," Mupita said. Nigeria’s central bank said last week said it was considering new information provided by MTN and four banks into the outflows and that it expected to resolve the matter soon.
MTN’s shares pared an earlier gain of as much as 3.7% to trade 2.3% higher at R89.59 at 3:57pm in Johannesburg on Monday. In the weeks after Nigerian authorities challenged the transfer of funds, MTN plunged 35%, but the stock has since recovered about half of that drop. "That cost our shareholders $5.5bn," said Mupita.
MTN’s investor base is about 44% South African. Other major shareholders are in the US, UK, Europe and the Middle East.
MTN still sees a great business case for Nigeria, Africa’s most populous country, with less than a third of users on the internet, Mupita said.
"We are engaging with authorities and investors and hope to reach a speedy resolution on the matter, to deal with the overhang on our share and the concerns of shareholders about Nigeria’s investment climate," Mupita said.
Nigerian authorities are changing their tone after coming under criticism that the impasse with MTN and lenders including Citigroup, Standard Chartered, Standard Bank Group and Lagos-based Diamond Bank threatened to spook investors.