MTN targets NSE listing in September next year
Africa’s biggest mobile-phone operator is moving closer to a listing on the Nigerian exchange, a move that could help it regain goodwill among Nigerians and make it less vulnerable to regulatory crackdowns, according to analysts including Eurasia Group’s Amaka Anku.
MTN agreed on the listing as part of a deal to reduce the regulatory fine, originally set at $5.2 billion.
“Listing might not be worth it for the company’s balance sheet in the short term,” Anku, a senior Africa analyst at Eurasia, said in an emailed response to questions. “The main benefit for MTN would be increased goodwill from a wider section of the Nigerian population.”
The share sale will probably happen by September next year, after regulatory issues caused delays and the stock market slumped as the economy contracted, MTN Chairman Phuthuma Nhleko said in January. The company, which made 35 percent of its revenue in Nigeria in 2015 and is reporting earnings for last year on Thursday, appointed units of Citigroup Inc. and Standard Bank Group Ltd. to advise it.
The value of a listing “is not something you can quantify in dollars and pounds, or naira and kobo, but it’s a lot when they’re trying to seek approval or if they’re going into some new venture that they need government support for,” said Pabina Yinkere, the Lagos-based head of research at Vetiva Capital Management Ltd. “The level of scrutiny could have been easier had they been on the good books of the government.”
The Nigerian Stock Exchange All Share Index was the world’s worst performer last year among 94 indexes tracked by Bloomberg, losing 41 percent in dollar terms. The market slump came as the economy faced its worst downturn in more than two decades amid lower oil revenue and capital controls that deterred investment.
The chief executive of Nigeria’s stock exchange, Oscar Onyema, has been trying to convince the country’s biggest mobile-phone companies to list for years. Neither Bharti Airtel Ltd.’s local unit, Lagos-based Globacom Ltd., or Abu Dhabi-based Emirates Telecommunications Corp., known as Etisalat, have sold stock in Nigeria.
MTN shares dropped 2.3 percent to 117.01 rand by the market close in Johannesburg Wednesday. (Bloomberg)
