MTN Nigeria IPO to begin August after SEC’s go ahead – Olalekan Ipele & Abimbola Hassan

The worry of investors and stakeholders awaiting an announced date for the much anticipated MTN Nigeria initial public offering (IPO) is finally over, as sources privy to developments have confirmed to BusinessDay exclusively that August is the targeted beginning date for the planned sale. This follows a final go ahead given by the Securities and Exchange Commission (SEC). “After 6 weeks delay by SEC, the MTN IPO is set to go. MTN is targeting August to begin the share sale,” a source familiar with the matter told BusinessDay.

Minority shareholders of the telecommunication giant have frequently lamented being kept in the dark by the company as the listing of the Nigerian unit continues to generate vast interest across board.

MTN plans to list its Nigerian unit which BusinessDay estimates is worth between N3.2trn ($8.56 billion) and N3.9trn ($10.88 billion) on the Nigerian Stock Exchange (NSE), and may use part of the fresh funds raised to reduce debt.

The sale of the Nigerian unit of MTN will the second major listing the telecommunication giants will be undertaking in the West Africa region this year with the Ghana IPO being the most recent.

MTN started the sale of its Ghanaian unit worth $754 million over a month ago (May 29) in an initial public offering. The listing was 10 times larger than Ghana’s previous biggest-ever share sale. The company offered 4.64 billion shares in the unit at 75 pesewas each, representing 35 percent of its value.

MTN Group may sell at least 10 percent of its stake in its Nigerian subsidiary to pay preference shareholders, Reuters reported earlier in the year.

MTN Nigeria has around 402 million shares in issue, the same amount in preference shares, which it sold at $0.99 in 2007.

As part of the IPO it would split one share into 50 units, to create 20 billion shares, which would be listed on the bourse and set the IPO price via book building, according to a Pre- IPO presentation.

MTN has also been engaging extensively with the Nigerian Stock Exchange (NSE), sources tell BusinessDay. The extensive engagement is on the structure and parameters of the listing.

In show of commitment to move ahead with the 2018 target, the group recently appointed Chapel Hill Denham as lead manager for the initial public offering (IPO). Other appointed advisers are South Africa’s Rand Merchant Bank, Renaissance Capital and Vetiva Capital.

The telecoms firm is also working with Stanbic IBTC Capital, Standard Bank of South Africa, Standard Advisory London and Citigroup Global Markets, as joint advisors and global coordinators, with Stanbic acting as lead issuer.

MTN Group said in a note preceding its financials for the year ended December 31, 2017 that “management has already initiated its Corporate Governance Rating Scoring with the NSE with a view to listing on the NSE’s Premium Board.”

The Premium Board of the NSE includes the likes of Dangote Cement Plc, Zenith Bank Plc, FBN Holdings Plc, Seplat Petroleum Development Company Plc, Access Bank Plc, Lafarge Africa Plc and United Bank for Africa Plc.

For full year 2017, MTN Nigeria subscriber’s base was 52.3 million, its revenue increased by 11.4percent and data revenue increased by 86.6percent.

MTN agreed to list the Nigerian unit on the Nigerian Stock Exchange as part of a June 2016 agreement to pay a $1 billion fine for missing a deadline to disconnect unregistered subscribers amid a security crackdown.

The listing of MTN Nigeria will broaden the sectors of the NSE and reduce the weightings of banking and cement on the Nigerian bourse, giving investors more options for diversification.

BusinessDay