16 May 2019

Nigeria: Markets Anticipate MTN Listing in Nigeria

Lagos — ANALYSTS are keenly awaiting the listing of MTN on the Nigerian Stock Exchange (NSE) on Thursday morning.

Reports indicate that the deal by Nigeria's largest non-oil company by revenue is valued at around U$6 billion.

"Given the market is down ytd (year-to-date) because investors have ignored most positive catalysts, we think MTN is likely to test the market's lethargy given its strong growth story," said Tunde Abidoye, Equity Researcher at FBNQuest Capital.

The market expert said the listing looks "decent" assuming it is lists at N90 (US$0,25) /per share, and that 20 billion shares are listed, while the implied current price-to-earnings ratio (P/E) multiple is 9,1 times.

This is given MTN's earnings growth outlook is likely to remain in the double-digit territory in the near term.

MTN Nigeria's target dividend distribution is around 80 percent, subject to board approval.

The company always seeks to maximise dividend distribution.

MTN raised about N200 billion worth of debt in 2018.

It will be in the market to seek additional debt finance of N200 billion in 2019.

Management disclosed that the company will be making a final payment of N55 billion of its N330 billion regulatory fine by the end of May.

MTN Nigeria's growth in voice revenue continues to be driven by strong y/y growth in the number of subscribers, which were up by around 15 percent y/y in 2018.

Presently, MTN accounts for about 39 percent of total number of mobile phone subscribers in Nigeria. Globacom, Airtel and 9mobile have market shares of 26,2 percent, 25,6 percent and 9,2 percent respectively.

On Wednesday, May 15, the Johannesburg Stock Exchange-listed parent company said the listing of MTN Nigeria deepened the equity capital markets base of the country, which made it possible to broaden the shareholding base of the Nigerian entity.

It disclosed the listing by introduction means that the existing shares of MTN Group (78,8 percent), the Nigerian investors (19,4 percent) and other investors (1,8 percent) will be listed without an additional public sale of shares.

"From this point, all MTN Nigeria shareholders will be free to trade their shares on the NSE," the MTN Group stated.

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