MTN Nigeria has received approval and will proceed to list its shares on the Nigerian Stock Exchange on May 16, 2019. The company entered a settlement in December 2018 paying $53 million to the Government of Nigeria out of $8.1 billion tax demand and the listing is believed to be an extension of this process.
MTN entered Nigeria in 2001 and it has grown to be a key market for the Group. It accounts for 55 million of their total 210 million subscribers in Africa and the Middle East. 25% of their subscribers are in Nigeria compared to 13% in SA. They get 30% of revenue from Nigeria, compared to 29% from SA, with Nigeria growing in the double digits. MTN which has 79 million data customers and 27 million mobile money customers in 2018, plans to introduce mobile money in South Africa, Nigeria, Afghanistan and Sudan this year.
The Group owns 75.81% of MTN Nigeria through a Mauritius company while Nigerian shareholders own 18.7% through special purpose vehicles. 1.76% is owned by the Public Investment Corporation of South Africa.
With its shares introduced at 90 Naira each, based on recent private share sales, MTN Nigeria is valued at about $5 billion. All shares of the company are being listed and all shareholders will be able to trade their shares. MTN plans to get more Nigerians to increase their stake in the company to about 35% through the listing and a public offer that may follow. Besides Nigeria, the Group also plans to increase local ownership of its operations in Uganda and Zambia during 2019.
Edit February 2022: MTN Group completed the sale of 575 million shares to Nigerian investors – both qualified institutional investors and retail investors. The offer was oversubscribed 1.4x with 126,000 investors applying for 802 million shares. It contained a 15% green shoe option – so 661 million shares were allocated to investors and raised 4.3 billion rand (approx $280 million).
A few weeks after the Central Bank of Nigeria (CBN) directed local commercial banks to refund foreign currency (forex) it says telecommunications giant MTN had banked through them, the CBN has gone ahead to debit the accounts of two banks it cited for facilitating what it termed as illegal capital repatriation from Nigeria.
The banks mentioned were Standard Chartered, Stanbic IBTC, Citibank, and Diamond Bank which were all directed to refund a total sum of $8.13 billion for breaching Nigeria’s forex rules on behalf of MTN.
It was later reported that the CBN had debited N2.4 billion ($7.9 million) in fines from Standard Chartered and N1.2 billion from Citigroup. The CBN spokesman said they had investigated the remittance of forex by the banks related to irregular certificates of capital importation (CCI’s) issued to offshore investors of MTN and concluded that $3.45 billion was repatriated by Standard Chartered Bank, $2.6 billion by Stanbic IBTC, $1.7 billion by Citibank Nigeria and $348 million by Diamond Bank between 2007 and 2015.
MTN had been in talks to raise funds, possible do an IPO in Nigeria which is their largest market, like a recent one in Ghana. In various statements to shareholders on the matter, MTN said they are a law-abiding corporate citizen and that the issue of historic dividends allegedly repatriated by MTN Nigeria between 2007 and 2015 had been investigated and concluded at the Nigerian senate which found that there was no collusion to contravene forex laws.
MTN’s has since sued the CBN and Attorney General of Nigeria to restrain them from taking further action against assets of the company.
EDIT: December 24, 2018:
After discussions between the Central Bank and MTN, a settlement deal was arrived at which will see MTN pay just US$53.2 million, a tiny fraction of the $8.1 billion the Bank had sought from the group’s subsidiary in the West African country.
EDIT: Jan 10 2020: The Attorney General of Nigeria withdrew the $2 billion tax demand against MTN Nigeria.
To be updated