MTN has agreed to sell its associate stake in Belgacom International Carrier Services (BICS) to Proximus for R1.8 billion.
In a statement this morning, the mobile operator says further to the updates provided in its 2020 interim and third quarter results, MTN is pleased to announce the group has concluded an agreement to sell, and thereby fully exit, its 20% shareholding in BICS.
It notes the timing of closing is dependent on customary regulatory approvals.
Once all the conditions precedent have been fulfilled, MTN will receive proceeds of approximately €100 million (R1.8 billion) in cash, which the group intends to use to pay down US dollar debt and for general corporate purposes.
The company adds the transaction consideration compared to MTN’s market capitalisation results in a percentage below the categorisation threshold as prescribed in the listings requirements of the Johannesburg Stock Exchange.
According to MTN, BICS was classified as a non-current asset held for sale and this transaction has resulted in a remeasurement of its carrying value resulting in a reduction of R397 million for the year ended 31 December 2020.
MTN will record a profit on disposal amounting to approximately R1.2 billion during the first half of 2021, mainly due to the release of the foreign currency translation reserve. This results in a net impact of R812 million over the two periods, the telco says.
“The sale represents further progress in MTN’s stated asset realisation programme, which aims to reduce debt, simplify its portfolio, reduce risk, improve returns and unlock value,” MTN concludes.
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