MTN sells Cyprus unit to Monaco Telecom for R4.1bn
MTN Dubai, a wholly-owned subsidiary of MTN Group, has entered into an agreement in which it has sold 100% of MTN Cyprus to Monaco Telecom as part of an ongoing review of its portfolio.
The net sale proceeds of EUR260 million (approximately R4.1 billion) will be paid upfront in cash.
In a statement, MTN says the transaction values MTN Cyprus at approximately eight times reported 2017 EBITDA.
In addition, MTN has agreed to allow Monaco Telecom to use the MTN brand in Cyprus for up to three years in return for a commercial fee.
MTN Cyprus is MTN's only operating business in the European Union, and was acquired as part of MTN Group's acquisition of telecoms holding company Investcom in 2006. It falls outside the group's core footprint of Africa and the Middle East.
The transaction, which is subject to various closing adjustments, allows MTN to realise an attractive valuation for the asset.
MTN expects the transaction, which is not subject to any completion conditions, to close within the third quarter of 2018.
The accounting effects of the transaction will be communicated with the 2018 interim results that will be released on 8 August 2018, says MTN.
The transaction does not classify as a categorised transaction as per the JSE Listings Requirements.