MTN Group, the parent company of Nigeria’s telecom giant, MTN Nigeria, which controls 40% market share, has concluded plans to sell 575 million units of its ordinary shares in MTN Nigeria to investors in the local market.
It announced the news this morning, Thursday, November 4, 2021.
In a letter to the Nigerian Stock Exchange, MTN Nigeria Communications Plc said the public offer for sale will be by way of a bookbuild to institutional investors and fixed price to retail investors.
“The offer is anticipated to open in November 2021 with a bookbuild to institutional investors, after which a fixed price is expected to be announced for retail investors also in November 2021”, MTN stated, adding that it is expected to close in December, 2021.
“This is the first step in MTN Group’s previously communicated statement of intent to sell down approximately 14% of its current shareholding in MTN Nigeria,” it said, even as the 575 million units expected to be on offer this month represent 3.7% of the company’s shares outstanding.
Market analysts believe that this move by the telecommunications giant is a part of its stance to further democratise the company, with more Nigerian shareholders, a position mainly influenced by the Nigeria Communications Commission, (NCC)’s fine imposed on the company about six years ago.
According to market analysts, this may be a strategy aimed at deepening public sentiment and hopefully mitigating the exposure of the MTN Group to future fiscal events in Nigeria, as the company may now be seen as being owned by Nigerians.
The MTN Nigeria’s current share price at the Nigerian Stock Exchange is N175.60 as of Wednesday, November 3, 2021, a rally that is partly driven by the performance of the company and the limited float of the stock on the Nigerian Exchange.
Based on the company’s disclosure as at December 2020, 92% of the shares of MTN Nigeria was closely held by 13 shareholders, including the parent company which owns 76.8% in the Nigerian subsidiary, through MTN International (Mauritius) Ltd, leaving barely 8.01% of the company as float available for trading on the NGX and belonging to 8,349 institutional and retail shareholders.
