MTN Eyes Cross-Listing In Nigeria After Resolving Record Fine
Africa’s biggest telecommunications services provider, MTN Group, is considering cross-listing on the Nigerian Stock Exchange after it resolves a dispute with the country’s communications regulator, the company’s executive chairman said on Thursday.
Phutuma Nhleko said the cellular giant would list in the Nigerian bourse after a $3.9 billion fine imposed on it by the Nigerian Communications Commission (NCC) late last year, for failing to switch off 5.1 million unregistered subscribers, was fully resolved, IOL reported.
The fine was initially place at $5.2 billion, but was reduced to $3.9 billion after negotiations between the two parties.
Last week, MTN said it had paid $250 million to the Nigerian federal government and withdrawn a court case contesting the fine. This, it said, was a sign of good faith and showed it was committed to resolving the issue amicably.
According to a Reuters report, the mobile services operator said it has set aside $600 million to cover a potential settlement of the fine.
“MTN’s auditors have required that the company make a provision in line with the International Financial Reporting Standards (IFRS). Discussions with the Nigerian authorities continue on the matter,” Nhleko said, adding that the company could also not have listed before renewing its license.
MTN, which already trades its shares at the Johannesburg Stock Exchange, renewed its license in Nigeria in November for another five years.
The populous west African nation is its biggest market with 63 million customers. In total, it has 233 million subscribers across the Middle East and Africa.
Some market analysts however cautioned that the process of listing in the country should not be rushed, while others saw it as a good move that will endear the company to Nigerians.
Philip Short of Mutual Equities told IOL that the Nigerian market was still volatile and that there are regulatory challenges that the company should address first before cross-listing.
“If they list in Nigeria, most Nigerians will not view MTN as a South African company,” Sibonginkosi Nyanga, an analyst at Momentum SP Reid Securities, told IOL.