The long-anticipated Initial Public Offering (IPO) of MTN Communications Nigeria Limited is now in the doubts, following an order by Nigeria’s apex bank (CBN) demanding the telco to immediately refund billions of dollars that were allegedly remitted to South Africa illegally.
Anonymous sources at MTN confirmed to Bloomberg over the weekend that CBN’s latest imposition on the company destabilised ongoing plans to see through the IPO. At the moment, the ‘regulatory certainty’ needed for the IPO to go ahead is not guaranteed.
Last Friday, MTN Group’s spokeswoman (Mimi Kalinda) also hinted at the uncertainty through email comments sent to Bloomberg. According to her:
“Our IPO has always been subject to satisfactory market conditions and this event will potentially make it complicated for us to make it happen.”
Meanwhile, the NCC wants the IPO to go ahead
The Nigerian Communication Commission (NCC) recently gave MTN an ultimatum of May 2019 to list on the Nigerian bourse. Failure to do so could result in further consequences for the telco.
The requirement for MTN to list on the Nigerian Stock Exchange became necessary towards the settlement of a different regulatory controversy in which the telco was immersed back in 2015. As we repeatedly reported, the NCC initially imposed a fine of $5 billion on the company over unregistered sims. But the sum was eventually reduced to $1 billion; on the proviso that MTN lists on the NSE.
MTN is very worried…
As uncertainty now hangs over the IPO (the processes of which have already advanced to a reasonable extent), MTN Group is reportedly worried the NCC may reimpose the initial fine of $5 billion after May 2019.
Either way, Africa’s leading telco should indeed be worried. Asides the likelihood that it may not meet the May 2019 deadline, the company will struggle to refund the $8.1 billion which is about half of its market capitalisation.
As we reported, the CBN ordered MTN on Wednesday to refund the $8.1 billion. It also imposed a ₦5.86 billion fine on the four banks that facilitated the alleged crime; namely Standard Chartered Bank, Stanbic IBTC, Diamond Bank Plc and Citibank.
The controversy sent MTN Group’s shares plunging to all-time lows in over five years.
