MTN Group Limited intends to proceed with plans to raise capital through an Initial Public Offering (IPO) on the Nigerian Stock Exchange (NSE) in Q2 2019, once it resolves the $2 billion tax dispute with Nigerian authorities.
A spokesman to the company, Mr Tobe Okigbo, disclosed this today in Lagos, while fielding questions from journalists. In his words –
“The board can assign a value to the company and we do an IPO. It is difficult to put a value on it when there is such an issue.”
The IPO was initially put on hold – MTN’s IPO on the Nigerian Stock Exchange, which was initially planned for last year, was put on hold in October due to the company’s many issues with the Nigerian Government.
The $2 billion tax case may be resolved soon – As Nairametrics reported earlier, the protracted tussle between MTN and the Attorney General could soon come to an end after a court hearing that has been scheduled for March 26th.
MTN to start mobile banking – As the tax and the IPO issues are still pending, MTN has gotten approval to kickoff mobile banking and also sell smart phones in the country.
Details of the IPO
MTN would issue about 402 million shares, with one share split into 50 units to create 20 billion shares. With this, the company will be able to set the IPO price through book building.
The Nigerian investment firm Chapel Hill Denham, is the leading issuing house for the IPO, while South Africa’s Rand Merchant Bank, Renaissance Capital, and Vetiva Capital are the joint issuers. These bank and brokers will work with global co-ordinators, Citigroup Inc. and Standard Bank Group Ltd.
Why the IPO? – Part of the revenue from the IPO will be used by MTN to pay up its debt to Nigeria and redeem preference shares issued to existing investors who bought the shares 11 years ago. It will also help in reducing the company’s exposure to the dollar.