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MTN considers scrapping Nigerian IPO as dispute weighs on shares

Oct 01 2018 16:50
Loni Prinsloo, Bloomberg

MTN [JSE:MTN], the wireless carrier facing a combined $10bn in claims from Nigerian authorities, said it may no longer seek to raise capital through an initial public offering (IPO) on the country’s stock exchange.

Africa’s largest mobile phone company is considering other options of trading its shares on the Lagos-based bourse, including a so-called listing by introduction, in which existing shares are listed, chief financial officer Ralph Mupita said in an interview in Johannesburg.

MTN’s board still needs to make a final decision, he said.

“The IPO type of listing has become challenging under current market conditions,” Mupita said. “We are exploring other options. The Nigerian business would not get fair value under current market conditions. The simplest way to go forward would be an introduction on the Nigerian Stock Exchange.”

MTN could complete the listing in its biggest market by the end of this year or first quarter of next year, the CFO said. The company’s stock has plunged in the wake of a dispute with the central bank over the repatriation of $8.1bn out of the country and a separate tussle with the attorney general’s office over $2bn in back taxes.

Listing the business on the local exchange forms part of a settlement two years ago over unregistered SIM cards, when MTN negotiated a $5.2bn fine down to about $1bn.

“We have sought legal protection for our Nigerian business and a judge has been appointed for upcoming hearings,” Mupita said.

The central bank last week said it is reviewing new information provided by MTN and the banks into the outflows and that it expects to resolve the matter soon.

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mtn  |  nigeria  |  ict  |  companies
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