Ejiofor Alike, with agency reports
MTN Group has said it would push on with a plan to reduce its majority stake in the wireless carrier’s Nigerian business, though turmoil caused by the COVID-19 may require the sale to be done in smaller chunks than anticipated.
The telecoms group said it might consider a phased sale to reduce its majority stake in its Nigerian business.
Bloomberg reported that MTN is disposing of part of its largest division after a series of disputes with Nigerian authorities, most recently over tax payments and the withdrawal of cash from the country.
The plan is to sell about a 15 per cent stake to local investors, reducing MTN’s ownership to about 64 per cent.
MTN was listed on the Nigerian Stock Exchange (NSE) last year, and is the country’s second-biggest publicly-traded company.
Nigeria is the company’s biggest market, accounting for a third of overall 2019 revenue and almost 40 per cent of earnings before interest, taxes, depreciation and amortisation.
The Johannesburg-based company is also the biggest provider of telecom services in the country, with almost 69 million customers, according to the Nigerian Communications Commission (NCC).
MTN Group Chief Executive Officer, Mr. Ralph Mupita, said in an interview that the impact of the virus on international financial markets did not change the mobile network operator’s plans to sell part of its 79 per cent shareholding to local investors.
“In Nigeria, we still want to do part of our retail offer, even if it’s a smaller part of the total planned sale,” Mupita told Bloomberg by phone, adding: “We are applying our minds to doing this at the moment.”
MTN had earlier revised its medium-term target for its divestment plan and now wants to secure a further 25 billion rand ($1.40 billion) in asset sales over the next three to five-years.
The asset sales include an 18.9 per cent stake in African online retailer Jumia, a 27 billion rand worth stake in Mauritius-headquartered IHS Towers, MTN Nigeria’s public offering and share sales to local investors in its Ugandan and Zambian units.
Mupita said the impact of the pandemic on international financial markets would not change the importance of selling part of the 79 per cent shareholding to local investors.
However, the rest of a three-to-five-year plan to dispose of 25-billion rand ($1.4 billion) of assets would probably take a back seat, for now, he said.