Fidelity bank card banner Emerald Energy Institute Camano banner

MTN’s woes mount

By News Express on 15/06/2017

Gmail icon

Views: 1,276

The woes of MTN Communications mounted on Wednesday when Moody’s downgraded the company, along with other companies following the downgrading of South Africa’s credit ratings by Moody’s last week, in the wake of S&P Global Ratings and Fitch junking the country’s foreign currency rating.

Moody’s has downgraded senior unsecured notes issued by MTN to Ba1 from Baa3. The group’s outlook was changed to stable from negative.

MTN is facing a number of headwinds in its key markets, SA and Nigeria, including weak macroeconomic environments, regulatory challenges, local currency weakness and dollar shortages in Nigeria, which has negatively affected the group’s performance.

Moody’s viewed MTN’s liquidity as “good” for the next 12-18 months with internally generated cash flows and sufficient undrawn committed facilities to meet the capital investments in Nigeria, SA and Iran, as well as the firm’s dividend payout.

Moody’s was monitoring MTN’s inability to upstream dividends from MTN Nigeria, its funding requirements for MTN SA and dividend payments to equity shareholders and the effect this will have on the mobile network operator’s liquidity profile and credit metrics.

Matthew Auerbach of Capricorn Fund Managers said the downgrade was “quite significant as it puts the dividend in future years at risk. Whilst management have committed to the dividend this year, the market may be disappointed by the dividend in future years. Share prices don’t react well to dividend cuts.”

MTN’s share price declined nearly 2% to close at R111.60.

Mergence Investment Managers portfolio manager Peter Takaendesa expected the downgrade to have a minimal effect on the company in the near term, but the risk, not only to MTN, was that SA would be downgraded further and corporates were dragged down.

According to Takaendesa, most of MTN’s debt was long dated and some of it was on fixed interest rates.

“Only about 10% of their gross debt is due to be refinanced this year and there is no material further debt raising requirement as they managed to repatriate a significant amount of cash from Iran … this year.”

Takaendesa expected the group’s elevated capital expenditure levels to start dropping from 2018. MTN forecast capital expenditure of R35bn in 2017.

•Adapted from a Business Day SA report.



Source News Express

Posted 15/06/2017 9:32:22 PM





You may also like...
Aregbesola given award despite failure to pay workers'...

Benedict reveals why he stepped down as pope...

Benue killings ‘a planned genocide’

New Aare Musulumi of Yoruba land installed

Niger arrests 9 military officers over coup plot...

Doctors remove 10-cm nail from patient’s lungs

Militants blow up two more crude oil pipelines...

Unrepentant mosque attack suspect grins in court

Court to hear El-Zakzaky’s application to travel abroad...

Presidency shops for new Inspector-General of Police •Screens...

APGA fingers PDP over crisis

Kidnapped chieftain regains freedom


Latest News 3 suspected kidnappers shot dead Border closure: Compromise and go to jail, Customs CG warns officers Kaduna Govt rubbishes audio of alleged killings along Kaduna-Abuja highway Bandits kill 6 people in Kaduna •See names of victims Agency DG, Accountant in EFCC net for alleged diversion of salaries Kogi poll: PDP accuses Gov. Bello of purchasing PVCs FEC approves N166bn for repair, construction of 14 Federal roads Lagos passport office extends work days Ex-health minister arrested over Ebola funds We’ll make UNILAG Africa’s top four by 2022 — VC COZA: Why Nigeria Police should stop harassing Pastor Fatoyinbo — Rights group EFCC storms hideout, arrests 11 suspected Internet fraudsters


Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (539,815 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (442,651 views) Shameless Genevieve Nnaji exposes breasts in public (388,869 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (326,392 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (294,323 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (253,479 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (249,473 views) 10 cars more expensive than Jets (238,093 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (231,229 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (217,227 views) Lagos plane crash: Journalist releases victims’ names (195,643 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (193,280 views)


CBN milk production

CBN banner advert

UBA Wise Savers Promo


Categories Advertorials (3) African Press Organisation (81) Art & Literature (102) Business & Economy (4,443) Business Verdict (80) Columnists (1,108) Complaints & Requests (96) Enterprise & Opportunities (215) Entertainment (661) Features (806) Global Business Monitor (441) ICT Monitor (63) International (3,944) Interview (203) Live Commentary (30) Love Matters (170) Maggie's Blog (410) News (51,291) Opinion (1,355) Pidgin (17) Politics (11,438) Religion (1,102) Sports (2,166) Stock Watch (39) AMA & Al Jazeera Global Update







APO Group Partner




GOCOP Accredited Member

GOCOP Accredited member



Africa Media Agency and Al Jazeera