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Uncertainty beclouds MTN’s planned IPO due to $8.1bn controversy

NCC recently gave MTN an ultimatum of May 2019 to list on the Nigerian bourse.

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MTN Nigeria

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.

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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.

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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.

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The controversy sent MTN Group’s shares plunging to all-time lows in over five years.

Patricia

Emmanuel covers the financial services sector for Nairametrics. Do you have a scoop for him? Well then, contact him via his email- [email protected]

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Hospitality & Travel

Passengers can now arrive 90 minutes before departure for domestic flights – FG

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international passengers, Coronavirus: FG enforces immediate screening of travellers at airports with new directive

The Federal Government has announced the reduction of arrival time for passengers from three hours to one hour and a half before departure for domestic flights.

This was disclosed in a tweet post by the Minister for Aviation, Hadi Sirika, through his Twitter handle on Monday, July 13, 2020.

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The minister said that the decision was arrived at after they have reviewed passenger facilitation at the airport while noting that passengers should check-in online.

In the tweet post, Sirika said, ‘’My colleagues and I have reviewed passenger facilitation at our airports, consequently I am happy to announce that, henceforth travellers are to arrive one hour and half before their departure time for domestic flights. Travellers are advised to check-in online, please.’’

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It can be recalled that the Federal Airports Authority of Nigeria (FAAN) had earlier in June issued flight resumption protocol for both international and local passengers across the country, advising passengers to arrive at the airport three hours before their time due to the new COVID-19 safety checks for domestic flight operations and five hours for international flight operations.

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Economy & Politics

Seyi Makinde Proposes N3 billion investment plan for water supply

The local governments in Oyo are advised to submit a list of 10 faulty boreholes in the LG. 

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Seyi Makinde Proposes N3 Billion plan for water supply

The Governor of Oyo State, Seyi Makinde announced the proposal of a N3 billion investment plan dedicated to water supply in rural and urban areas of the state.

Speaking through the Chairman of Rural Water Supply and Sanitation Agency (RUWASSA), Mr. Najeem Omirinde in Ibadan on Monday, he added that N500 million of the N3 billion would be used for repairing broken and faulty state-owned boreholes.

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All Chairmen of each of the Local Governments in Oyo are advised to submit a list of 10 faulty boreholes in the Local governments.

The Oyo State governor also ordered that all new boreholes must be compliant with solar-powered pumps, to enable their longevity and save costs.

Urging residents to patronize the agency if they need to dig up boreholes for water, citing that it would be cheaper if done through the state agency than with private drilling companies.

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Minister of Finance, Zainab Ahmed stated last year that Nigeria needs an estimated N36 trillion annually for the next 30 years to solve Nigeria’s infrastructure problem. The investment, although a tiny fraction of what Nigeria needs is a bold step by the Oyo State government.

 

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Economy & Politics

FG asks UK court for more time to appeal $9.6 billion arbitration judgement

Malami stated that the Evidence of P&ID’s highly orchestrated scam had only recently come to light. 

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FG asks UK court for more time to appeal $9.6 billion arbitration judgement

The Federal Government has approached a UK court to appeal for more time to appeal the $9.6 billion arbitration award against it over the breach of contract with Process & Industrial Development (P&ID) Ltd.

Nigeria has said that it needs more time to pursue its argument that the 2010 gas supply contract with Process & Industrial Development Ltd was a sham.

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The legal dispute with P&ID is coming against the backdrop of the huge drop in the country’s revenue due to the collapse in oil prices globally. Nigeria had applied to US courts in March seeking for documents from 10 banks which includes Citigroup Inc. and JPMorgan Chase & Co, in a bid to prove its corruption allegations.

P&ID, however, has denied any wrongdoing in the whole transaction, arguing that Nigeria missed its opportunity to appeal.

The Nigerian Lawyer, Mark Howard, on Monday, the first morning of a 2-day hearing, said ‘’It is very unusual in a fraud case to discover a single smoking gun. By its very nature, fraud is conducted in secret, which makes it hard to detect and justifies an extension.’

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READ MORE: The effect of the United States’ Shale Oil on Nigeria?

The legal representatives for Nigeria are seeking another hearing for the judge to decide whether any misconduct has taken place and whether it justifies overturning the contract

The Attorney General and Minister for Justice, Abubakar Malami in a statement said, ‘’Evidence of P&ID’s highly orchestrated scam had only recently come to light.’’

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It can be recalled that last year, a UK judge upheld an earlier arbitration award to P&ID, which had accumulated to about $9.6 billion. The arbitration decision was over a failed contract to build a gas processing plant in the Southern city of Calabar.

The Nigerian lawyers disclosed that they have uncovered alleged bribes to government officials and their family members dating back to 2009.

Malami in his court filing on March 24, submitted that ‘’There is good reason to believe that ministers at the highest level were involved in a corrupt scheme to steal money from Nigeria.’’

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