MTN Group Ltd has announced that it is considering plans to scrap its planned Initial Public Offering Offer on the floor of the Nigerian Stock exchange because of several issues the company is currently battling with Nigerian financial Authorities.
MTN Group is currently facing fines of up to $10 billion from Nigerian authorities for infractions of the country’s financial repatriation laws.
Africa’s largest mobile carrier is reconsidering the IPO amid a dispute with authorities in its biggest market that wiped more than a third off the company’s market value over three weeks.
MTN had pledged to list-the shares after being fined $1 billion for not disconnecting SIM cards two years ago.
The Telecommunications giant however is actively seeking for other means of trading stock in Lagos, including what it called an ‘introduction’ where existing shares are listed.
According to the Chief Financial Officer of the MTN Group in Johannesburg Ralph Mupita;
“MTN’s Nigerian shares already trade over the counter. The IPO type of listing has become challenging under current market conditions, we are exploring other options.
The Nigerian business would not get fair value under current market conditions. A listing by introduction is the simplest way forward,” he reiterated.
He however continued;
“MTN could complete the listing by the end of this year or first quarter of 2019, the CFO said. Despite the dispute with the central bank over the repatriation of $8.1 billion out of Nigeria and a separate tussle over $2 billion in back taxes MTN is committed to a listing.
We have sought legal protection for our Nigerian business and a judge has been appointed for upcoming hearings,” Mupita concluded.
Nigeria’s Apex Bank, the Central Bank of Nigeria who imposed the fines reiterated last week that the institution was considering new information provided by MTN and four banks into the outflows and that it expects to resolve the matter soon.
MTN’s shares pared an earlier gain of as much as 3.7 percent to close 2.1 percent higher at 89.40 rand in Johannesburg on Monday.
However the shares plunged 35% after Nigerian authorities challenged the transfer of funds from the country.
Mupita said that although the stock has since recovered about half of that drop, the incident cost the shareholders $5.5 billion.
“MTN’s investor base is about 44 percent South African. Other major shareholders are based in the U.S., the U.K., Europe and the Middle East.
MTN still sees a great business case for Nigeria, Africa’s most populous nation, with less than a third of users currently on the internet.
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 for foreign companies.”