As MTN Moves to List Shares on Stock Exchange…

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Emma Okonji examines the value MTN would bring to the Nigerian Economy when its shares are listed on the Nigerian Stock Exchange (NSE) within the first quarter of 2017

When MTN Nigeria agreed to list its shares on the Nigerian Stock Exchange as part of the deal to pay the reduced N330 billion fine in cash to the Nigerian government for missing the deadline to disconnect 5.2 million unregistered subscribers on its network, many doubted the telecoms company’s commitment to the promise. This was because of the preconceived notion about MTN in the past. Their conclusion may have been drawn based on past persistent calls by Nigerians, for MTN to list on the stock exchange and make its shares public, which MTN did not heed. However, MTN perhaps, waited for the right time to make initial public offering (IPO) of its shares.

The negative perception of Nigerians about MTN began to change gradually, when last month, the telecoms company announced the appointment of Stanbic IBTC Capital Limited, its affiliates — The Standard Bank of South Africa Limited and Standard Advisory London Limited — and Citigroup Global Markets Limited as its Joint Transaction Advisors and Joint Global Coordinators, with Stanbic acting as Lead Issuing House, to handle its listing on the stock exchange.

The hope and trust for MTN, however increased again last week, when MTN made a bold step and met with the Securities and Exchange Commission (SEC), the Capital Market regulator, to discuss the possible initial public offering (IPO) of its shares on the NSE and how it wants to structure the share sale.

These moves by MTN, no doubt, are beginning to make Nigerians not only see the commitment of MTN to telecoms development in Nigeria, but also to see its commitment to Nigeria’s economic development, through job creation.

According to them, MTN Nigeria has, through taxes and other levies, employment generation and other activities, contributed about 4 per cent of Nigeria’s GDP, and MTN has continued to invest and change the lives of people, despite pockets of lacerating relationships with the Nigerian government.

MTN’s Move to Go Public

MTN Nigeria, last week, visited the Securities and Exchange Commission (SEC) to open discussion and commence the process for the listing of its shares on the Nigerian Stock Exchange.

According to Reuters, SEC Director General, Mounir Gwarzo, said MTN visited the commission to discuss the possibility of issuing various classes of shares to targeted investor groups. He said the telecoms firm was looking at three different classes, which would be new in Nigeria.

Gwarzo said the SEC was willing to support the share sale as long as it was within local laws and advised the telecoms firm to ensure retail investors were protected.

MTN, it was gathered, also discussed the possibility of getting some concessions that will speed up the listing.

The joint financial advisers and issuing houses to MTN on the proposed IPO and listing – Standard Bank of South Africa Limited, Citigroup Global Markets Limited and Stanbic IBTC – accompanied the management of the company to the meeting with SEC.

“I can confirm to you that the management of the MTN Group and its advisors met with the SEC management. The main purpose was for them to ask for details of the procedure to embark on the IPO and the possibility of getting some concessions to fast-track the offer process,” Gwarzo said.

The outcome of the meeting shows that the MTN IPO would likely come up in the first quarter of 2017, depending on the economic situation in the country.

MTN had, in a statement in July, announced that it was targeting 2017 to list its shares on the NSE.

According to the statement, “MTN Nigeria is pleased to announce that its Board of Directors has resolved to proceed with preparations for a listing of MTN Nigeria on the NSE as soon as commercially and legally possible and has established a management task team with the responsibility to guide the company towards a listing.”

Stakeholders’ Reaction

Stakeholders in the telecoms sector have continued to react to the current move by MTN to list on the Nigerian Stock Exchange. According to them, MTN should be commended for keeping to the agreement it reached with the federal government, to list the company’s shares on the NSE. “This is commendable and it goes to show the commitment of MTN to economic development of Nigeria, from where it is making so much money through the quality of services it is rendering to Nigerians, being the largest telecoms operator in Nigeria,” one of the stakeholders said.

The President of National Association of Telecoms Subscribers (NATCOMS), Chief Deolu Ogunbanjo, told THISDAY that MTN had shown that it is a company to reckon with, that is willing to promote and support businesses in Nigeria.

“The over 150 million subscribers, which I represent, have been calling on MTN to list its shares on the NSE to enable Nigerians invest in the company and become part owner, but this has not come through since the call started, but I am glad to know that the MTN Board of Directors has approved the listing of the telecoms company, which I think is the right thing to do,” Ogunbanjo said.

The Chief Executive Officer of Teledom Group, Dr. Emmanuel Ekuwem, who is a great advocate of local content development in the telecoms sector, also commended the move by MTN to commence the process of listing. MTN should be commended and other telecoms operators should be encouraged to begin the process of listing, Ekuwem said.

Some Reservations

Although Ogunbanjo has expressed his happiness that MTN is finally coming to the stock market, he however expressed some worries that MTN might not make the IPO accessible to every Nigerian, who may be interested in buying the MTN shares, based on the condition of the share sale formula that MTN is proposing. MTN is looking at the possibility of issuing various classes of shares to targeted investor groups. According to source, MTN is looking at three different classes which would be new in Nigeria, but SEC said it would be willing to support the share sale formula as long as it was within local laws and advised the telecoms firm to ensure retail investors were protected.

Ogunbanjo therefore called on MTN to make its shares accessible to all Nigerians, including telecoms subscribers of low income earnings.

Ekuwem was of the view that MTN had to look inward and address all issues that could impede growth, after it may have concluded the listing. According to him, most companies that listed on the Nigerian Stock Exchange are finding it difficult to grow after listing as a result of the inherent challenges in listing, which MTN must first address.

Corroborating Ekuwem, Ogunbanjo said most companies that got listed were also doing well and that MTN could learn from the success stories of such successful companies.

In order to perfect a smooth listing, Ekuwem advised SEC to ensure that it determines the total value of MTN and the value of shares that the telecoms company is willing to release to the public, so that Nigerians will not be short-changed.

Economic Value

Looking at the economic value of the plans to list on the NSE, Ekuwem said it would make Nigerians have a sense of ownership of the telecoms giant, and in so doing, protect the facilities of the company from vandals, since they have a stake in the company. It will empower more Nigerians who will be willing to buy the shares and it would add more value to the economy of the country, Ekuwem said.

Ogunbanjo said it would be an opportunity for Nigerians to hold shares in MTN, and in the process, MTN would make more money for expansion of its telecoms business, because I foresee a situation where the MTN shares would be over-subscribed, the moment the IPO is open.

He was of the view that it would help MTN to protect its facilities in Nigeria, since shareholders and their relatives would do everything to protect their investment. He added that listing on the stock exchange would give MTN more brand visibility both locally and internationally.

Although Nigerians were meant to believe that MTN was having a field day in the Nigerian telecoms space, and carting away billions of naira to its parent company in South Africa, recent developments have shown that the telecoms company has invested heavily in the Nigerian economy, providing direct and indirect jobs for millions of Nigerians and contributing to the economy through payment of taxes, since its inception in 2001. Such a company should be encouraged by government, notwithstanding some of its past mistakes, some stakeholders told THISDAY.