Posted by News Express | 2 September 2016 | 2,192 times
MTN Group, Africa’s biggest wireless operator by sales, and minority shareholders in its Nigerian business are seeking to raise about $1bn in an initial public offering (IPO), a condition tied to the settlement of a record fine imposed by the West African government, people familiar with the plan said.
Minority shareholders may sell down their holdings or exit entirely, while MTN may offer a small portion of its stake in the business, one of the people said, declining to be identified because the details are private. MTN is still fine-tuning any offer and no final decision has been made on the amount, the people said. MTN declined to comment.
The IPO is part of a deal struck with the Nigerian government to pay a $1bn penalty for missing a deadline to disconnect unregistered subscribers. The negotiations over the fine, which has contributed to a 38% decline in MTN’s share price since it became public in October, cost R1.3bn in professional-service fees, according to the company. Nigeria is MTN’s biggest money spinner, accounting for more than a third of the sales and profit for a company that has a market value on the JSE of R220bn.
Nigeria’s economic slump deepened in the second quarter as a declining oil industry weighed on output, with GDP in Africa’s most populous country contracting by 2.1% from a year earlier, after shrinking 0.4% in the first quarter.
The Nigerian Stock Exchange’s all-share index has slumped 7% over the past year, as a currency peg that lasted about 16 months deterred foreign investors, weighed on growth and led to a lack of dollars, curbing imports and causing shortages from fuel to industrial materials.
MTN said in July that it hired Citigroup and Standard Bank Group as advisers on the transaction.
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