MTN targets 2017 for listing of shares in Nigeria

• Plan triggers hope of market recovery
• Firm appoints Stanbic IBTC Capital as issuing house

South Africa’s telecommunications firm, MTN, will list its shares on the Nigerian Stock Exchange (NSE) in 2017 .

Analysts say the decision was part of agreement the company reached with the Federal Government as a condition for slashing the fine imposed on it by the Nigeria Communications Commission (NCC) from $5.2 billion to N330 billion.

The fine was imposed when the Nigerian subsidiary, MTN Nigeria, was found to have breached the ‘know-your-customer’ rules set by the NCC.

MTN, however, says the listing will be subject to suitable market conditions in commercial and legal terms.

Telecoms operators in Nigeria have been under pressure to list on the exchange to widen equity ownership and tame what many consider as undue profit repatriation. Analysts also believe that listing the telecoms firms on the exchange would deepen the market.

Efforts to secure commitment to future listing of shares from Airtel, Globacom and Etisalat yesterday were unsuccessful as sources within the organisations could not immediately come up with their plans.

The Chief Executive Officer of the NSE, Oscar Onyeama, had at the World Federation of Exchanges (WFE) in Seoul, South Korea, hinted that the bourse was making progress in its bid to persuade the four telecommunications firms to list their shares and offer ordinary citizens part-ownership.

He said the NSE was “gaining traction” in trying to entice more companies to place initial public offerings in the interest of the Nigerian economy.

MTN, in a statement, says it has appointed Stanbic IBTC Capital Limited (together with its affiliates, The Standard Bank of South Africa Limited and Standard Advisory London Limited) (collectively “Stanbic”) and Citigroup Global Markets Limited (“Citi”) as its joint transaction advisors and joint global coordinators with Stanbic acting as lead issuing house. It added that a full syndicate, including Nigerian receiving agents, Nigerian receiving banks and other advisers would be appointed in due course, as appropriate.

The South African firm further disclosed that this statement “does not constitute an announcement of an intention to float MTN Nigeria. MTN Nigeria will make further announcements at appropriate intervals on progress in this regard.

“The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction.”

The firm, which was launched in 1994 in Johannesburg, South Africa, currently connects subscribers in 22 countries in Africa, Asia and the Middle East, with 230.3 million subscribers as at April 30, 2016.

In Nigeria, which is the largest and richest market, checks by The Guardian showed that it still leads the market with 39 per cent shares and 58 million subscribers.

MTN further explained that this new announcement is not for publication or distribution, directly or indirectly, in or into the United States of America (including its territories and possessions, any state of the United States and the District of Columbia).

“This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States”, it stated.

According to the firm, this announcement is only being distributed to and is only directed at (A) persons located outside the European Economic Area or, if located within the European Economic Area, are qualified investors within the meaning of the Prospectus Directive as implemented in the relevant member state of the European Economic Area; (B) persons who are located outside the United Kingdom or, if located within the United Kingdom, are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons in (A) and (B) above together being referred to as “relevant persons”).

Capital market operators have described MTN Nigeria’s decision to become a Public Liability Company (Plc) as a ‘welcome development’, saying it would deepen the market and encourage the active participation of indigenous consumers in the company’s wealth creation process. There have been growing agitations for multinationals in telecoms, oil and gas companies to list on the nation’s bourse by way of public offer.

Analysts have argued that listing big corporations on the exchange will significantly raise the capitalisation of the stock market currently estimated at slightly above N9 trillion.

A sectorial analysis of the market shows that the telecommunications sector is under-represented. MTN, if listed, would become the first major national telecoms company whose shares would be traded on the NSE.

NSE had provided a legislation that covers incentives, unbundling of stringent eligibility requirements that create high barriers for potential entrants and hinder participation by willing businesses, adopting options that promote foreign investment in the economy under terms that support national interest without exposing the market to the dangers of the past.

President of the Institute of Capital Market Registrars, Bayo Olugbemi expects other telecoms players as well as major oil companies and the power sector to join the train.

Corroborating his view, the President, Renaissance Shareholders Association, Timothy Olufemi said: “It is good for the NSE. It would deepen the market. It is to the advantage of the operators especially. Good luck to operators.”

The Managing Director, Crane Securities Limited, Mike Eze also affirmed that the listing would help to deepen the market. He added that it would stimulate other telecoms participants to list as it would trigger

“The indication by MTN that they intend to get listed is a sign of one of the long-overdue listings that the market had anticipated but they kept dilly-dallying. First, it is going to help deepen the market. Secondly, it will help to stimulate Airtel, Glo, Etisalat among others, to come to the stock market and be listed.”