MTN’s listing delay raises new concern
The prolonged delay by MTN Nigeria to list its shares on the Nigerian Stock Exchange (NSE) has become a renewed source of worry to capital market stakeholders, as they expressed fear that the action may dampen the zeal of others that had earlier declared interest to come for Initial Public Offering (IPO).
Already, blames have gone the way of the Federal Government for failure to include, as part of the license requirements, that it must be listed on the stock exchange, saying it is the major reason for MTN’s delayed action.
The telecommunications giant, had in July 2016, announced that its board had resolved to proceed with preparations for a listing of its shares on NSE.The mobile operator had also said the IPO will go ahead “as soon as it is commercially and legally possible”, and had established a management task team with the responsibility to guide the company towards the listing.
According to pre-IPO documents seen by an international online news platform, MTN was to list its Nigerian unit worth $5.23 billion by July 2017.It plans to raise at least $400 million from the IPO to pay preference shareholders and go on a roadshow between May and June.But with the way and manner MTN was handling the issue, market operators said it is now doubtful that MTN IPO and subsequent listing on the stock exchange is possible this year.
Specifically, the Managing Director of APT Securities and Funds Limited, Malam Garba Kurfi, said that MTN was dragging the issue because of the way and manner things were handled in the country.“I will not be surprised if they come with another excuse to shift the offer to next year, as there is nothing on the ground to confirm their seriousness.
Another incident that fueled insinuations that MTN may not approach the market in a near future was a statement by the Securities and Exchange Commission (SEC) that neither MTN Nigeria Limited nor any of its advisers or representatives has filed any application on the IPO with the commission.But the MTN Group had earlier indicated that listing on the stock exchange would be subject to “favourable economic conditions”.
The increasing political risks, already reflected by protracted bearish investor sentiment and the overall weak performance of the capital market, have heightened speculations that MTN may not list on the local bourse in 2018.Therefore, the stakeholders insisted that government must include listing on the stock exchange as part of license requirements for multinationals going forward.
According to them, if MTN does not list in 2018, it will join a number of companies that have abandoned their 2018 listing ambitions.Reacting to the development, an economist, Johnson Chukwu, told The Guardian that unless Nigerian government adopts what is obtainable in other emerging countries, multinationals like MTN, will not keep to agreements.
“For multinationals, Nigeria must consider what Ghana did. Before Ghanaian government issued a 4G license to MTN, they included as part of the issuance requirements, that it must have its operations listed in the stock exchange within 15 months of securing the 4G.”The Publicity Secretary of the Independence Shareholders Association, Moses Igbrude, said: “MTN, other telecommunications and oil majors in the upstream industry, which are not listed on the exchange, is the result of government’s failure, for not including that important clause on compulsory listing on NSE.
“The blame rests on our leaders, who seems not to know the value of the capital market to the growth of the Nigeria economy. MTN, as an institution, is not willing to list on the stock exchange, if not for the 2015 penalty imposed on it by NCC.“Kudos to those who drafted the settlement agreement for including the clause on mandatory listing of their shares on stock exchange, as one of the conditions to settle the matter. NSE, SEC and government should encourage and persuades other issuers to come to the market by giving them incentives.”
The National Coordinator of Constance Shareholders Association, Shehu Mallam Mikail, attributed MTN’s prolonged delay in listing of their shares to government’s unfavorable policies.“It is due to government’s unfavorable policies that investors are always taking much time to study, before taking any step that has to do with coming into the market. Our government needs to be more proactive and create enabling environment for issuers and operators,” he said.