MTN sells its Cyprus business to Monaco Telecom for R4.1bn

MTN has sold its Cyprus business to Monaco Telecom for R4.1bn, the Johannesburg-based firm announced on Monday.

The deal, which is expected to be finalised during the third quarter of 2018, is not subject to any conditions, and will be financed in cash.

The company said the transaction was part of an ongoing review of its portfolio. 

"The net sale proceeds of €260 million, approximately R4,1bn, will be paid upfront in cash," the company said in a statement.

The transaction values MTN Cyprus at approximately eight times reported 2017 earnings before interest, tax, depreciation and amortisation (EBITDA).

"In addition, MTN has agreed to allow Monaco Telecom to use the MTN brand in Cyprus for up to three years in return for a commercial fee."

MTN Cyprus was the group’s only business operation in the European Union.

MTN is Africa’s largest mobile phone operator and operates in 22 countries in the continent and the Middle East and said the Cyprus operations fell outside the group’s core footprint.

"The accounting effects of the transaction will be communicated with the 2018 interim results that will be released on August 8, 2018," the company said.

MTN [JSE:MTN] shares were trading at R105.81 at 11:17 on Monday, down 0.82% on the day.