29 November 2012

Nigeria: Ramaphosa's Company Buys U.S.$335 Million Stake in MTN Nigeria

A South African investment company, Shanduka Group Limited, led by businessman, Cyril Ramaphosa, has bought a minority stake in MTN Nigeria in a strategy to tap into faster-growing African markets.

According to Bloomberg, Shanduka acquired a $335 million stake in Nigeria's largest mobile operator with more than 45.6 million subscribers, it said in a statement yesterday.

Shanduka said it bought the stake through its Mauritian unit from three private investors including private equity company African Capital Alliance.

MTN, Africa's biggest mobile-phone operator, owns 78.8 per cent of MTN Nigeria Communications Limited, according to the statement.

The deal is part of a plan to expand on the continent outside South Africa, where growth rates are expected to exceed those in its home market, Shanduka Chief Executive Officer Phuti Mahanyele said Wednesday.

Nigerian economy is expected to grow by 6.5 per cent this year and in 2013, President Goodluck Jonathan said on October 10.

The International Monetary Fund (IMF) expects growth in sub-Saharan Africa to reach 5.7 per cent in 2013, while South Africa will probably expand three per cent, it said on October 9.

"It's a compelling story for us," Mahanyele said on phone in Johannesburg. "Nigeria is the biggest telecoms market in Africa, surpassing South Africa. It's an attractive destination and the density is at such a level that there is the opportunity for growth," he said.

Shanduka may consider an initial public offer of its stock at an appropriate time, Mahanyele said.

The group "is still at the early stages of deciding what portion of the business we would list, and whether it would list the entire company or industry groups, such as its diversified resources investments," she said.

The company's investments include coal, platinum, property, energy, telecommunications, fast foods and financial services.

Ramaphosa, former Secretary General of the African National Congress (ANC), is a lawyer, trade union leader, activist, politician and a businessman.

Using his position as a trade unionist and politician, his companies were beneficiaries of the post-apartheid black empowerment programme.

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