Nume Ekeghe with agency report
The MTN Group plans to raise about $500 million from the sale of shares in its Nigerian business during the first half of the year, fulfilling the terms of a deal struck with the West African nation to settle a record fine, according to people familiar with the matter.
Standard Bank Group Limited and Citigroup have been advising Africaâ€™s largest mobile-phone company on the disposal of as much as 30 percent of the Lagos-based unit on the Nigerian Stock Exchange,Bloomberg quoted people who asked not to be identified as the details arenâ€™t public.
Most of the shares will be sold to local institutions and individuals, though foreign investors could be brought in to ensure the process is a success, one of the people said.
Discussions are on-going and a final decision hasnâ€™t been made, they said.
Spokespeople for MTN and Citigroup in Johannesburg didnâ€™t immediately comment. Standard Bank didnâ€™t immediately respond to calls seeking comment.
MTN agreed to list the Nigerian unit 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 penalty, originally set at $5.2 billion, led to the resignation of the Johannesburg-based companyâ€™s then chief executive officer and a slump in the share price thatâ€™s yet to be clawed back.
The stock extended gains, and traded 4.5 percent higher at 128.83 rand as of the close in Johannesburg, giving a market value of 243 billion rand ($20 billion).
If successful, the Lagos share sale will be the biggest on the Nigerian Stock Exchange after Starcomms Plc, which raised $796 million when it listed in 2008, according to data compiled by Bloomberg.
MTN, Nigeriaâ€™s biggest mobile-phone company with just over 50 million subscribers as of end September, slumped to a loss in 2016 as it absorbed the financial impact of the fine, though said last month it returned to profit the following year.
Nigeria and other sub-Saharan African governments are trying to gain more from international mobile-phone operators taking advantage of rising smartphone use and faster data speeds.
MTN has also agreed to sell shares in Ghana as one of the conditions of a deal to gain spectrum rights, while Vodacom Group Ltd., South Africaâ€™s market leader, was ordered to list 25 percent of its Tanzanian business last year, raising $213 million