The long-anticipated Initial Public Offering (IPO) of MTN Communications Nigeria Limited, will most likely experience difficulties due to the $10.1 billion demand by the Nigerian authorities.
This was disclosed yesterday by Mr Ralph Mupita, the Chief Financial Officer of MTN Group Limited who used the phrase “pretty challenging and awkward” to describe the IPO during an interview in South Africa.
However, Mr Mapita did admit that the preparations for the planned listing on the Nigerian Stock Exchange have already progressed to a reasonable extent in spite of the company’s recent troubles with the authorities.
In his own words:
“We are not sitting here saying the listing is off. The listing is to remain on track. It’s just that the development makes the IPO that we had planned pretty challenging and awkward. But we have got to explore other options of continuing to meet the listing requirements.”
This development is a confirmation of the growing worries in the company over the IPO as reported by Nairametrics.
Recall that the Central Bank of Nigeria (CBN) late last month demanded that MTN Group Limited return the sum of $8.1 billion which it was alleged to have illegally repatriated to South Africa from its Nigerian operation between 2006 and 2016.
But the company has yet to comply with the CBN demand, even as it continues to claim innocence. Meanwhile, as though to compound MTN’s troubles, the office of Nigeria’s Attorney General last week made known its intentions to recover the sum of $2 billion from MTN which it claims the telco owes in back taxes. This too was denied by the company’s management.
MTN stated that it would engage the authorities towards ensuring a resolution to the issues. But earlier this week, the company disclosed that it has taken both the CBN and Nigeria’s Attorney General to court with hopes of halting the $10.1 billion payment required of it, whilst protecting the company’s assets in Nigeria and shareholders’ rights.
It is yet to be seen how this whole matter settles at the end. In the meantime, the company’s shares continue to decline as a result of the regulatory crisis.