Africa's largest mobile operator, MTN, finally reached a breakthrough after two months of negotiations with the Central Bank of Nigeria over disputed dividend remittances to the tune of $8.1bn (R117.8bn) this week.
The central bank had accused the mobile operator of improperly repatriating the dividends between 2007 and 2015, demanding the full amount be returned. MTN said the amounts were dividends meant for MTN Nigeria's international shareholders, and had been remitted within the law.
The bank finally concluded shortly before Christmas that the dividends had been remitted properly and no longer had to be returned. MTN shares gained as much as 8% when the news broke on Thursday. The dividends that were initially demanded to be returned nearly equalled MTN's R165bn market cap.
The conclusion of the talks means MTN will now have to pay $52.6m in penalties related to preference share transactions from 2008 which the central bank had deemed "irregular".
A number of international businesses such as Standard Chartered, Standard Bank and Citigroup have run into problems with Nigerian authorities over similar issues relating to the country's strict foreign exchange controls.
The negotiated settlement sees MTN paying the notional reversal amount without an admission of liability.
The mobile operator had a difficult 2018, as its shares fell as much as 37% for the year on the back of uncertainty in Nigeria.
MTN has had tumultuous relations with Nigerian authorities for the past three years, and although a settlement has been reached with the central bank, it still faces another issue. The operator is continuing to fight the Nigerian attorney general for back taxes of more than $2bn that it has been ordered to pay.
Nigeria's telecommunications authority also fined the JSE-listed operator $5.2bn in 2015 for failing to disconnect customers with unregistered SIM cards.
The West African economic powerhouse accounts for a third of MTN's revenue.
This week's announcement is likely to put fresh wind in MTN's sails to pursue its proposed listing on the Nigerian Stock Exchange, which had been hampered in recent months by the spat with the central bank...