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Wednesday, Feb 19th

Likely delay in MTN Nigeria listing

Likely delay in MTN Nigeria listing

MTN may delay its planned listing on the Nigerian Stock Exchange (NSE) until next year, when "regulatory issues" have been resolved.

Group executive chairman Phuthuma Nhleko told Bloomberg at the World Economic Forum in Davos, Switzerland, last week that the listing was still a work in progress and that the telco was hoping to make it a reality in the next 12 to 18 months.

Nhleko was quoted as saying that first regulatory issues needed to be resolved and macro conditions needed to improve.

Last July, MTN Nigeria announced it had established a management task team to guide the company towards a listing in the West African country, targeting for it to be finalised during 2017. At the time, it said the listing was still, however, subject to suitable market conditions.

The mobile giant promised to make a secondary listing on the NSE as soon as it was commercially and legally possible as part of a 330 billion naira fine settlement arrangement with the Federal Government of Nigeria. MTN's primary listing is in SA, on the Johannesburg Stock Exchange.

The settlement came after MTN was slapped with a N1.04 trillion fine by the Nigerian Communication Commission in October 2015 for failing to meet a deadline to disconnect 5.1 million unregistered SIM cards in Nigeria. The fine was later reduced by 25% to N780 billion, before the amount of N330 billion was agreed upon after months of negotiations.

When the fine settlement was reached in June 2016, N330 billion was worth around R25 billion but today it is closer to R14.6 billion due to currency changes.

The Nigerian listing, however, hit a bump in September 2016 when an upper house Nigerian senator accused MTN of illegally repatriating almost $14 billion (R189 billion) out of the country over 10 years. MTN refuted the allegations, with MTN Nigeria CEO Ferdi Moolman calling them "completely unfounded and without any merit".

In October, Nhleko confirmed MTN Nigeria and its bankers were cooperating with the investigation "with a view to resolving the matter as expeditiously as possible".

In November, Reuters reported that the Nigerian listing was still on the cards and MTN had met with Nigeria's Securities and Exchange Commission (SEC) to discuss a possible initial public offering and how it wanted to structure the share sale.

At the time, SEC director-general Mounir Gwarzo said MTN had discussed the possibility of issuing various classes of shares to targeted investor groups. He said the telecom firm was looking at three different classes, which would be new in Nigeria.

The NSE All Share Index was the world's worst performer last year among 94 indexes tracked by Bloomberg, losing 41% in dollar terms.

Nigeria remains MTN's biggest market and it has around 60 million subscribers in the country.

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