Uncertainty confuses MTN’s proposed IPO due to $8.1bn controversy

After the Initial Public Offering (IPO) of MTN Communications Nigeria Limited which Long-anticipated is now in suspense, following an order by Nigeria’s apex bank (CBN) asking the telco to immediately refund billions of dollars that were assertedly remitted to South Africa illegally.

Anonymous sources at MTN verified to Bloomberg over the weekend that CBN’s latest imposition on the company destabilized ongoing plans to see through the IPO. At the moment, the ‘regulatory certainty’ required for the IPO to go ahead not guaranteed.

Last Friday, MTN Group’s spokesperson (Mimi Kalinda) also hinted at the plausibility through email remarks sent to Bloomberg. According to her:
    “Our IPO has continually been subject to satisfying market conditions also this event will potentially make it difficult for us to make it happen.”

Meantime, the NCC requires the IPO to go ahead

Nigerian Communication Commission (NCC) lately gave MTN an ultimatum of May 2019 to list on the Nigerian bourse. Failure to do so could produce further consequences for the telco.

The demand for MTN to list on the Nigerian Stock Exchange became necessary towards the settlement of a different regulatory controversy in which the telco immersed back in 2015. As we regularly reported, the NCC initially imposed a fine of $5 billion on the company over unregistered sims. But the sum was finally reduced to $1 billion; on the provision that MTN lists on the NSE.
MTN is very worried…

Uncertainty now hangs above the IPO (the processes of which have already advanced to a moderate extent), MTN Group is reportedly worried the NCC may reimpose the original fine of $5 billion after May 2019.

Both way, Africa’s leading telco should indeed be worried. Asides the probability that it may not meet the May 2019 deadline, the company will strive to refund the  $8.1 billion which is about half of its market capitalization.

While we reported, the CBN ordered MTN on Wednesday to refund the $8.1 billion. It also imposed a ₦5.86 billion fine on the four banks that aided the alleged crime; namely Standard Chartered Bank, Stanbic IBTC, Diamond Bank Plc and Citibank.

The controversy sent MTN Group’s shares falling to all-time lows in over five years.


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