Nigeria: Lockdown - MTN Group Renews Bid to Offload 15% Nigerian Stake

MTN Nigeria
1 April 2020

MTN Group has renewed its bid to cut its presence in Nigeria, by selling 15% stake to the subscribers. The operator said it is pursuing sale in smaller in bits due to the emergence of the Covid-19 (coronavirus) pandemic.

The Chief Financial Officer of the company, Ralph Mupita explained that the South Africa-based operator would reduce its majority stake in its Nigerian business, which remains the group's largest market, following numerous disputes with the country's government over the years.

The CFO also said the company was preparing for a larger increase in data usage as more markets go into lockdown.

It will be recalled that the company was recently mandated to return all improperly funds, as well as a demand for 2billion dollars in backdated taxes.

The operator currently holds a 79 per cent stake in the Nigerian business and plans to sell 15 per cent to local investors, but it will now likely conduct the sale in phases.

This is coming almost a year after MTN listed the unit on the county's stock exchange, valuing the business at $5 billion at the time.

According to Mupita, its proposed sale in Nigeria is part of a broader three-to-five-year plan to dispose $1.4 billion-worth of assets, which could be put on the fence for now.

Virus impact

The coronavirus crisis has hit MTN's share price significantly, reaching a 15-year low last week, but since rallying.

Mupita said the company, naturally, had no visibility on how it could all play out, but pointed to strong cash generation for its pre-paid contracts business and a resilient balance sheet.

The CFO also said the company was preparing for a larger increase in data usage as more markets go into lockdown.

"We want to make sure that our networks have resilience and capacity. "We are looking at where we can drive broader coverage," he added.

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