MTN rings bell on brighter days in Nigeria

19 May 2019 - 05:10 By NTANDO THUKWANA

The listing of MTN's Nigerian business this week on the Nigerian Stock Exchange (NSE) comes at a time when the company is viewed as trying to make amends with the nation's authorities after years of trouble in its biggest market.
On Thursday, MTN Nigeria listed on its local bourse with a valuation of $5bn (R71.8bn) and a single share set at a price point of 90 naira (R3.50).
MTN CFO Ralph Mupita said although the decision to finally list was part of making good on the conditions of the settlement of a 2015 Nigerian Communications Commission fine, this chimed with the company's own desire.
The telecom company's troubles in the Nigerian market began in 2015 when it was hit with a $5bn fine for its failure to disconnect the SIM cards of 5-million unregistered users.
Mupita said following the company's 2008 private share placement, which increased its shareholder base, the company had been in ongoing discussions to have it listed in its biggest market and Africa's biggest economy.
"The desire to list the company has been ongoing for at least 10 years," he said.
The mobile operator has 237-million customers, of whom 60-million are in Nigeria. They account for about a third of the company's profits.
"We've always said we need a much more sustainable structure to have more local ownership. And we have actually made the commitment as a company that in due course, and beyond this listing, we would want to broaden the Nigerian ownership of the company," said Mupita.
He said that after the company's observation of the Nigerian stock market, it had seen that large multinational firms on the exchange had an average free float of about 35%, a level MTN is aiming to reach.
"So we do anticipate that over time and subject to market conditions, our free float would increase from the 20%, which is largely in local hands, to more like 35%," he said.
Its share price soared 10% on the first day of trade, making MTN the second-biggest company listed on the NSE, after Dangote Cement.
With the company's dispute with the Nigerian Central Bank (NCB) now over, there is still an outstanding issue to be resolved with Nigeria's national auditor over a claim for back taxes.
The NCB ordered the telecoms giant to repatriate $8.1bn to Nigeria, which the bank said MTN sent to SA. In terms of an agreement MTN reached, it has paid a $53m settlement but has not admitted liability.
Mupita said MTN has the support of Nigerian authorities and that the company maintains a good relationship with them.
"We feel that our relationships are fine. We still have an issue that we need to resolve which is the matter around the AGF [auditor-general]. It's still in court and hopefully that issue gets resolved timeously," he said.
The next court date is in two weeks.
The carrier has, in its attempts to strengthen its leadership team, made high-profile appointments to its board, including former South African president Thabo Mbeki, who will chair the advisory board. Former Ghanaian president John Kufuor is also among the board members, as is Sanusi Lamido, a former governor of the NCB.
On the board changes, Mupita said: "It's a natural part of board evolution to evolve over time. Any board looks to have a mix of skill, trust in the industry and market, and getting an additional banker coming in, at the time that they were coming, I think it will strengthen the board going forward."

This article is reserved for Sunday Times subscribers.

A subscription gives you full digital access to all Sunday Times content.

Already subscribed? Simply sign in below.

Registered on the BusinessLIVE, Business Day, Financial Mail or Rand Daily Mail websites? Sign in with the same details.

Questions or problems? Email or call 0860 52 52 00.