MTN’s offer records 139.4% over-subscription as 6.6m Nigerians become shareholders

Telecommunications firm, MTN has said that the Series 1 offer for sale of 575 million shares offered to Nigerian investors was oversubscribed, necessitating the activation of approved 15 per cent over-subscription clause for additional 86.25 million shares.

MTN, which disclosed that the offer was oversubscribed with valid applications totaling 801.97 million units, said in all, 661.25 million MTN Nigeria shares were allotted.

The telecommunications firm, yesterday, in a document, signed by the Company Secretary, Uto Ukpanah, added that a total of 126,720 retail investors submitted valid applications and received full allotment; and institutional investors including pension funds, insurance companies, asset managers, corporates, and foreign portfolio investors that participated in the bookbuild were allotted 72.09 per cent of their applications. It said this includes Nigerian pension funds representing approximately 6.5 million Nigerian contributors.

Following the successful completion of the offer, MTN Group’s shareholding in MTN Nigeria reduced by 3.25 percentage points, from 78.83 per cent to 75.58 per cent.

In line with the innovative incentive structure of one free share for every 20 purchased, subject to a maximum of 250 free shares per investor, MTN disclosed that an additional 4.28 million MTN Nigeria shares would be allotted to qualifying investors, who hold the shares allotted to them for 12 months till January 31, 2023.

MTN Group said it adopted a unique structure in this offering by determining a fixed price of N169 per share for the retail offer through a Bookbuild to Qualified Investors that was completed on November 26, 2021.

It revealed that the fixed price offer to retail investors was at a discount of 11 per cent to the closing price of MTN Nigeria stock on the day the Bookbuild was completed.

MTN described the offer as a landmark transaction and a true reflection of Nigerian investor confidence in the Nigerian arm, adding that it marks the first time a digital application platform was used to democratise investing in a public offer and maximise investor participation across the country.

According to it, more than 89 per cent of retail offer subscribers applied through the primary offer platform (mobile and web), and 114,938 new Central Securities Clearing System (CSCS) accounts were opened by first-time investors.

Commenting, Chief Executive Officer of MTN Group, Ralph Mupita, said: “We are pleased that this Offer has given so many Nigerians the opportunity to become owners of MTN Nigeria. With over 6.6 million Nigerians directly or indirectly becoming shareholders in MTN Nigeria, the objective of broadening the shareholder base, and creating shared value has been achieved. We are proud that our Offer was the first Nigerian public offer to use the digital application platform, PrimaryOffer, which enabled wider investor participation across Nigeria. We thank the Nigerian authorities for their support of this Offer. We remain committed to playing our humble role in driving digital and financial inclusion in Nigeria over the medium.”

To the Nigerian CEO, Karl Toriola, MTN is delighted to welcome so many new shareholders to the MTN family, up 11.6 times from the number before the offer.

“It has been inspiring to see so many Nigerians, many of whom are young, acquire shares for the first time, and use a digital platform to do so. This is the beginning of a journey to broaden our shareholding and there will be more opportunities to participate.

“We are pleased with the level of digital innovation we championed with this offer with the active collaboration of our lead issuing house and the various regulatory bodies. Deepening retail participation in Nigeria’s capital markets is a process, and we are off to a great start, demonstrating the role digital platforms can play in expanding access. I am particularly pleased that we completed this transaction in an accelerated time frame ensuring new shareholders can realize value almost immediately through participation in our 2021 full-year dividend.”

Toriola, who appreciated the support of the Minister of Communications and Digital Economy, Prof. Isa Pantami, the Nigerian Communications Commission and the wider Federal Government for the opportunity to execute this Offer, also thanked the Securities and Exchange Commission, the Nigerian Exchange Limited, the CSCS, and all the parties involved for their support in delivering this ambitious Offer structure.

CEO of Chapel Hill Denham, the Lead Issuing House, Bolaji Balogun, said: “Chapel Hill Denham is honoured to have worked with MTN to complete Nigeria’s first digital and predominantly green offering. I wish to thank the SEC, the NGX, the CSCS, all the professional firms and other stakeholders, for delivering a big win for Nigeria’s capital markets in enabling the adoption of PrimaryOffer and this transaction marks a new and exciting future. Over 90 per cent of subscribers to the Offer were first time participants in the capital markets and MTN Nigeria’s strong investment case made this possible.”

Nigerian Exchange Limited (NGX) CEO, Temi Popoola, said: “NGX is proud to have worked with MTN Nigeria, Chapel Hill Denham and other parties to the transaction in advancing Nigeria’s capital market through the adoption of forward-looking technology. In the NGX era, we are resolute in our commitment to democratize finance in Nigeria in order to ensure every type of investor has access to public markets where they can invest in companies they believe in and reap value. With the digitised MTN Nigeria offering, we have made a tremendous stride in our plans for a full digital transformation of the Nigerian capital markets and we look forward to building on this.”

The CEO, Central Securities Clearing System Plc, Haruna Jalo-Waziri, said they were excited to be part of the innovation brought by the offer, which afforded the successful launch of PrimaryOffer digital application platform.

He said this further buttresses the necessity for digital transformation, allowing market access for all categories of investors, including institutional and retail investors within and outside of the country.