Posted by News Express | 11 June 2016 | 2,759 times
Africa’s communications giant MTN will soon listed on the Nigerian Stock Exchange (NSE) as part of a settlement with the Nigerian Communications Commission (NCC), which fined it a massive $5.2bn in October last year, for missing the deadline to disconnect 5.1m unregistered subscribers. The fine was later reduced to $3.9bn but MTN will only pay $1.67bn, about a third of the original fine of $5.2bn.
MTN Executive Chairman Phuthuma Nhleko said on Friday that the agreement was accelerating its existing plans of listing the company but would do so “as soon as commercially and legally possible.”
He, however, assured shareholders that the company would not lose control of the Nigerian subsidiary when the company is listed on the NSE.
Nhleko said the fine, to be settled over three years, would be paid through MTN Nigeria’s cash flows and not by the group’s. MTN operates in 22 countries.
“MTN Nigeria is capable under its own balance sheet to pay the fine. The group balance sheet won’t come to play in terms of servicing the fine,” he said.
Momentum SP Reid Sibonginkosi Nyanga said MTN Nigeria had a significant pile of cash. He said one of the positive aspects “is that the fine is denominated in Naira and with the depreciation of the Naira, this might end up being less in dollar terms.”
“We think it’s a decent settlement but a high price to pay for operational loopholes,” he said.
The fine resulted in the resignation of group CEO Sifiso Dabengwa. Nhleko said the group was on track to appoint a new CEO with the announcement expected this month.
MTN’s shares rose 13.18% to R140 on Friday.
•Adapted from a BusinessDAY South Africa report. Photo shows MTN Executive Chairman Phuthuma Nhleko.
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