Lagos - MTN is trying to reduce a $5.2bn fine imposed by Nigeria’s telecommunications regulator by as much as 80% and is considering borrowing money from banks to help settle the penalty, according to Renaissance Capital.
“MTN is pushing to reduce the fine by 60% to 80%,” Adesoji Solanke, RenCap’s head of research in Nigeria, said in a note to clients on Wednesday, citing a bank he didn’t identify.
A second lender said that “MTN is considering borrowing from banks, as it recently checked what the banks’ lending capacity to it is,” the analyst said.
MTN has until November 16 to pay the penalty, which relates to the timing of the disconnection of 5.1 million subscribers and is based on a charge of 200 000 naira ($1 005) for each unregistered customer.
The Johannesburg-based company’s shares lost almost a quarter of their value following the disclosure of the fine, before recovering 9% over the past two sessions.
MTN spokesperson Chris Maroleng wasn’t immediately available for comment. Chineze Gbenga-Oluwatoye, a spokesperson for MTN Nigeria in Lagos, declined to comment by phone and asked for questions by e-mail, to which she didn’t immediately respond.
“I don’t have that information,” Tony Ojobo, a spokesperson for the NCC, said in a text message.
MTN is being advised by some unidentified banks as the company pleads its case with the regulator, according to Solanke. A decision to borrow would be one of financial management rather than an indication of stress, he said.