MTN considers scrapping Nigerian IPO as it faces $10bn claims

MTN Group Limited said it may no longer seek to raise capital to finance its operations through an Initial Public Offering (IPO) on the Nigerian Stock Exchange (NSE).

IPO is the offering of stock to the public – stock market – for the first time by a private company planning to raise investment capital.

The development is coming against the backdrop of the recent $10.13 billion allegations of illegal repatriation of funds and tax evasion against it by the Central Bank of Nigeria (CBN) and the Office of the Attorney-General of the Federation (AGF).

The telecommunication company is considering other options of trading its shares on the Nigeria’s stock market, including a so-called listing by introduction, in which existing shares are listed, MTN’s Chief Financial Officer, Ralph Mupita, told Bloomberg in a recent interview in Johannesburg.

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According to him, the board of the company would still need to make a final decision on the matter.

“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.”

Mupita said the telco could complete the listing in Nigeria, its biggest market, by the end of this year or first quarter of next year.

MTN’s stock on the Johannesburg Stock Exchange (JSE) had plunged to the lowest level in nine years over a directive by the apex bank to refund a sum of $8.13 billion it allegedly repatriated through illegal means and a $2 billion in tax arrears the Federal Government demanded through the AGF’s office.

The listing of the business on NSE forms part of a settlement for a $5.2 billion (N1 trillion) fine placed on it by the Nigerian Communications Commission (NCC) for violating SIM card registration regulations in 2015 which it later negotiated down to about $1 billion.

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

The CBN last week said it was reviewing new information provided by MTN and four banks that allegedly aided the repatriation process with a view to arriving at an equitable resolution.

 

 

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