MTN Ghana listing to kick off this month
MTN says a planned initial public offering (IPO) in Ghana will likely happen by the end of this month.
"On 20 April 2018, we received all required regulatory approvals to proceed with the IPO in Ghana, which we expect to launch in late May 2018," the group said as part of a quarterly update for the three months to 31 March.
Under the terms of its 4G licence in Ghana, MTN's local operation is required to introduce Ghanaian investors as shareholders. MTN will offer a 35% stake in the Ghanaian business through the public offer on the Ghana Stock Exchange.
MTN says it has "made good progress" in the processes for both the IPO in Ghana and a planned listing in Nigeria which it aims to conclude during 2018. The group says that in line with the Nigeria IPO, it plans to release full financial results for MTN Nigeria on 7 May.
The listing on the Nigerian Stock Exchange has been on the cards for some time, and was originally planned for 2017. The mobile giant, currently listed on the Johannesburg Stock Exchange, promised to make a secondary listing in Nigeria as part of a 330 billion naira fine settlement arrangement with the federal government of Nigeria, made in June 2016.
The settlement came after MTN was slapped with a N1.04 trillion fine by the Nigerian Communications Commission in October 2015 for failing to meet a deadline to disconnect 5.1 million unregistered SIM cards in the West African nation. The fine was later reduced by 25% to N780 billion, before the amount of N330 billion was agreed on after months of negotiations; the equivalent of $1.671 billion or R25.1 billion at the time.
Last month, Reuters reported MTN had appointed Nigerian investment firm, Chapel Hill Denham, as lead manager for the Lagos IPO.
According to pre-IPO documents, seen by Reuters in February, MTN aims to list its Nigerian unit worth $5.23 billion (R63.6 billion) by July 2018 and raise funds to cut debt. It plans to raise at least $400 million (R4.9 billion) from the IPO to pay preference shareholders and go on a roadshow between May and June.
MTN seems to have also put out regulatory-related fires in Benin and Cameroon by coming to deals with local authorities.
MTN group president and CEO Rob Shuter said MTN Benin and the government of Benin have concluded a memorandum of understanding which includes the settlement of historic frequency fees, a five-year licence extension and the addition of fibre-to-the-x to the existing licence conditions. This will be settled by the payment of $63 million (R795 million) this month and a second payment of $63 million in December 2018.
"Negotiations around future frequency fees are continuing and expected to be concluded by the end of June 2018," Shuter said.
This after Benin's telecoms regulator, ARCEP, in November 2017 initiated a process to review why MTN had not paid outstanding invoices on frequency fees for 2016 and 2017. Last March, the government of Benin issued MTN Benin frequency fees invoices amounting to $213 million (R2.7 billion) for the period March 2016 to December 2017.
MTN Benin then contested the amount, saying it was "excessive" but said it would engage with the regulatory authorities to find an amicable solution.
Also in November, MTN Benin CEO Stephen Blewett was ordered to leave the country by its government, because of alleged engagement in "activities detrimental to security and public order". At the time, MTN said it had taken note of the government's concerns and Blewett would abide by the government's request, but refuted the allegations.
Meanwhile, MTN says its Cameroonian operation is "well advanced in agreeing the terms of its licence amendments and expects to sign the revised licence during May 2018". This despite MTN Cameroon remaining "a challenged market which recorded a worsening operating performance throughout 2017".
Service revenue in Cameroon for the first quarter of 2018 declined by 6.8% year-on-year (YOY) and voice revenue was also down 16.6% YOY. Data and digital revenue, however, grew by 15.7% and 106% respectively. Meanwhile, Mobile Money revenue increased by a massive 700% to account for 4.1% of service revenue in the country.
"Notwithstanding the weaker start to the year, we remain confident of the business returning to positive growth in the second half of the year," MTN said about Cameroon.
Further afield, MTN says it is "assessing both the impact and contingency planning given our exposure to ZTE in our networks" following the recent denial order issued by the US Department of Commerce.
In April, the US Commerce Department banned US companies from providing components, software and other technology to ZTE, saying it was punishing ZTE for violating the terms of a settlement agreement.