MTN Group Shares Surge After It Agrees To $1.7B Fine In Nigeria
MTN shares surged as much as 21 percent on Friday after the Africa’s largest telecom operator agreed to pay $1.7 billion fine to the Nigerian government, which could end a protracted legal battle between the firm and the West African nation’s communication regulator.
MTN shares trading at the Johannesburg Stock Exchange (JSE) were set to record the biggest intraday gain since 2008, Bloomberg reported.
Bloomberg further reported that the mobile-phone company would list on the Nigeria Stock Exchange as part of the deal that has seen the fine cut from $5.2 billion in October 2015 to $3.9 billion earlier this year.
“MTN is pleased to inform shareholders that the matter has been resolved with the Federal Government of Nigeria,” BDlive quoted the company saying in a statement on Friday.
“MTN Nigeria has agreed to pay a total cash amount of 330-billion naira over three years (the equivalent of $1.671bn at the official exchange rate and $902m at the Lagos parallel market rate) to the government in full and final settlement of the matter.”
The telecom company, which has more than 200 million subscribers in Africa and Middle East, has now regained its position as the most capitalized on the JSE after it lost the position to Vodacom last month.
MTN’s shares have devalued by 31 percent since October, when the Nigerian Communication Commission (NCC) fined it for allowing slightly over five million unregistered subscribers to continue using their SIM cards.
It is the largest operator in the West African country with more than 62 million subscribers. Nigeria has more than 170 million people, making it the most populous nation in Africa.
MTN’s reputation took a hit from the fallout which resulted in former CEO Sifiso Dabengwa stepping down and bringing in his predecessor Phuthuma Nhleko in an acting capacity to stabilize the ship and see the group through its negotiations with Nigerian authorities.
MTN’s business in South Africa also took a hit last year with a near two-month strike that led to the suspension of work at hundreds of call centers during that time.