Finally! SEC Gives a Go-Ahead for MTN’s IPO to Hold in August

Here is how the the CBN Sanction May Affect the Expected MTN Listing

After several speculations and delay, MTN Group has just received permission from the Securities and Exchange Commission, Nigeria (SEC) to list its Nigerian subsidiary on the stock market in August. This initial public offering (IPO) would see the company raise funds on the Nigerian Stock Exchange (NSE) to pay its huge pile of debt, as well as pay its preference shareholders.

According to reports, MTN is planning to list 30% of its Nigerian unit, from which it would raise at least, $500 million (considering the subsidiary’s speculated worth of $5.2 billion going by its shares currently traded over-the-counter in Nigeria at $13). This listing of  MTN Nigeria would make it the second subsidiary of the MTN Group in the West African region that would trade publicly, having recently listed 35% ($743m) of its Ghanaian unit in May.

The telco, which currently has about 402 million shares in issue from its last sale of shares in 2007, would as part of the IPO split one share into 50 units to create about 20 billion shares.  This would be listed on the bourse and set the IPO price via book building, according to a Pre-IPO presentation.

The decision to launch an IPO, which is believed to be a concession to authorities as part of the $1.7 billion settlement of a protracted SIM card dispute in June 2016, was initially planned for 2017 but was delayed due to poor market conditions the Nigerian Stock Market has faced for some years. The plan was reignited in 2018 and the company has since then proceeded in its plans, which include receiving its shareholders’ approval and the appointment of more banks; Chapel Hill Denham as lead manager, Renaissance Capital, FirstRand’s Rand Merchant Bank, and Vetiva Capital working as joint advisers for the process.

Should the IPO be fully launched, it would not only benefit MTN but would also be advantageous to the NSE as it would definitely help to revitalise the exchange and give confidence to foreign listings in the Nigerian stock market.

This development would serve as a relief to many of the company current/potential investors and stakeholders who have complained of being kept in the dark on the issues that concern the IPO process.

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