The MTN Group has started the process of listing its biggest subsidiary, MTN Nigeria, on the Nigerian Stock Exchange. They’ve appointed Standard Bank (via Stanbic IBTC) and Citigroup as their transaction advisors.
Recall that a few weeks back, the MTN Nigeria entered into an agreement with the Nigeria Communications Commission, with the intervention of the federal government to settle a billion-dollar fined slapped on the company. MTN was to pay a fine of $1.7 Billion which was to be paid over a period of three years. The company was also to abide by the compliance rules issued by the NCC in awarding of its license.
One other precondition set was that the South African company was to list on the Nigerian stock exchange as soon as possible. According to CNBC Africa, MTN Nigeria has begun taking measures to fulfill this commitment. MTN Nigeria aims for the listing to take place during 2017, subject to market conditions. The company has already appointed Stanbic IBTC Capital, Standard Bank of South Africa as joint transaction advisers and Standard Advisory London, and Citigroup Global Markets as its global coordinators. Stanbic will act as the lead transaction issuer.
The fine slapped on MTN Nigeria resulted from failure by the telco to register sim cards despite an order by the NCC to do so. NCC slapped a fine of $5 Billion on MTN Nigeria for failure to register 5 Million of its 62 million customers. The fine was later slashed to $3.4 Billion prompting negotiations between the regulator and the telco.
The commission had earlier exercised section 20(1) of the Telephone Subscribers regulation (TSR) law on MTN, for not meeting the deadline set up by the Mobile network operators (MNOs) for disconnecting the Subscribers Identification Modules (SIM) with improper registration. The compliance audit carried out by the NCC on MTN network revealed unregistered 5.2 million customers lines un-deactivated. This led to the NCC fining MTN with the sum of $1000 for each unregistered SIM, which amounted to $5.2bn.
What followed was major resignations among the top echelon of the organisation including the chief executive officer, Sifiso Dabengwa, the Head of Nigeria Operation, Micheal Ikpoki and the Head of Cooperate Affairs, Akinwale Goodluck being replaced with Phuthuma Nhleko, Ferdi Moolman and Amina Oyegbola as new chairman, managing director and Head of Corporate and Regulation respectively.
The new management employed a diplomatic measure between the government of the Republic of South Africa and its Nigerian counterpart to ameliorate the burden of the liabilities from the fine. This action brought about the reduction of the liability to $3.2 billion.
The registration of SIM cards started in the year 2010, the initial phase of this project was handled by the Mobile Network Operators (MNOs). However, NCC took over these operations because the service providers could not meet up with the six months earmarked by NCC. The registration by NCC started in March 2011 and it was anchored by seven consultants
MTN going public is a very good news to me, in fact its the best we could hear at this moment. This would enable Nigerians cut their own share of the “MTN cake”. Don’t you think?