MTN Group Ltd. has been having a
tough time of it in Nigeria, its most lucrative market.
Protesters last week vandalised
the company’s headquarters in the capital, Abuja, in retaliation for xenophobic
attacks on Nigerians in South Africa, singling it out among more than 100 other
Johannesburg-based businesses. It suffered its first-ever loss last year after
Nigeria’s regulator forced it to pay a $1 billion fine and disconnect 4.5
million customers for missing a deadline to cut off unregistered subscribers.
And in October, a lawmaker’s accusation of illegal money transfers sent its
stock price crashing.
Now, Africa’s biggest
mobile-phone operator is moving closer to a listing on the Nigerian exchange, a
move that could help it regain goodwill among Nigerians and make it less
vulnerable to regulatory crackdowns, according to analysts including Eurasia
Group’s Amaka Anku. MTN agreed on the listing as part of a deal to reduce the
regulatory fine, originally set at $5.2 billion.
“Listing might not be worth
it for the company’s balance sheet in the short term,” Anku, a senior Africa
analyst at Eurasia, said in an emailed response to questions. “The main benefit
for MTN would be increased goodwill from a wider section of the Nigerian
population.”
The share sale will probably happen by September next year, after
regulatory issues caused delays and the stock market slumped as the economy
contracted, MTN Chairman Phuthuma Nhleko said in January. The company, which
made 35 percent of its revenue in Nigeria in 2015 and is reporting earnings for
last year on Thursday, appointed units of Citigroup Inc. and Standard Bank
Group Ltd. to advise it.
The value of a listing “is not something you can quantify in
dollars and pounds, or naira and kobo, but it’s a lot when they’re trying to
seek approval or if they’re going into some new venture that they need
government support for,” said Pabina Yinkere, the Lagos-based head of research
at Vetiva Capital Management Ltd. “The level of scrutiny could have been easier
had they been on the good books of the government.”
The Nigerian Stock Exchange All Share Index was the world’s worst
performer last year among 94 indexes tracked by Bloomberg, losing 41 percent in
dollar terms. The market slump came as the economy faced its worst downturn in
more than two decades amid lower oil revenue and capital controls that deterred
investment.
The chief executive of Nigeria’s stock exchange, Oscar Onyema, has
been trying to convince the country’s biggest mobile-phone companies to list
for years. Neither Bharti Airtel Ltd.’s local unit, Lagos-based Globacom Ltd.,
or Abu Dhabi-based Emirates Telecommunications Corp., known as Etisalat, have
sold stock in Nigeria.
MTN shares dropped 2.3 percent to 117.01 rand by the market close
in Johannesburg Wednesday.
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