Rwanda: MTN Rwanda Lists on Stock Market

Shareholders of Crystal Telecom on Tuesday May 4, became direct shareholders of MTN Rwanda as the telco listed its shares on the Rwanda Stock Exchange.

A total of 1,350,886,600 ordinary shares were registered with the RSE at an initial listing price of Rwf269 per ordinary share.

At the time of suspension of trading of CTL shares late last month, the price per share stood at Rwf190.

The total market capitalisation of MTN Rwanda (MTN Rwandacell Plc) is Rwf 363,388,495,400, making it one of the most valuable firms in the country.

With the listing, 20 per cent of MTN Rwanda's shares which were previously held by CTL are now directly held by the public, a total of 270,177,320 shares.

The rest of the shares will be held by MTN REL (Mauritius) Limited, 337,721,650 shares (25 per cent) and MTN International (Mauritius) Limited 742,987,630 (55 per cent).

This means that the telco received a waiver from Capital Markets Authority and Rwanda Stock Exchange on the 25 per cent public holding requirement for listed companies.

Explaining why only 20 per cent will be available for the public, Ralph Mupita, the MTN Group President and Chief Executive said that it was among other things informed by previous experience listing in other markets as well as anticipated demand.

Mupita said that from their experience in previous listings in Ghana and Nigeria, the decision about the size of stake to avail for public trading was informed by demand patterns, need for capital and regulator engagement.

The firm did not need to raise capital but rather enable CTL exit was among factors considered.

"When we came to Rwanda, which is our third listing, the company did not mean to raise additional capital but rather restructure CTL to allow direct ownership. In time to come, if there is sufficient demand or a requirement by the regulator, we will be open to go beyond 20 per cent," he said.

"In Ghana, we went in with a desire to sell up to 30 per cent position from our 98 per cent position but when we did the IPO, we realized that there was only demand of about 12 per cent. Out of that, close to 8 per cent was by international investors," he added.

Celestin Rwabukumba the Chief Executive of the Rwanda Stock Exchange said that they explored multiple options before agreeing on the 20 per cent.

He said that while the local market has requirements for 25 per cent to be floated during listing, the boards of CMA and RSE have discretions to waivers depending on the need presented.

On having more than 20 per cent available for public trading, Rwabukumba noted that it would be based on capital market requirement, market demand among others.

"While I would want more (available for trading), I have to face realities and accommodate the needs of all parties, their (MTN ) interests have to come into consideration so that the shareholders and market benefit," he said.

Going forward, MTN Rwanda Chief Executive Mitwa Ng'ambi said that they are keen on delivering value to shareholders and continued investments by further establishing our presence, expanding connectivity, driving digital inclusion among others.

Minister of Finance and Economic Planning Uzziel Ndagijimana said that listing is proof of confidence in the economy, future of capital markets and would serve to improve the local ecosystem.

He noted that the Rwandan economy is on a recovery path and is expected to grow by 5.1 per cent in 2021 and 7 per cent in 2022.

For dividend payout, MTN Rwandacell Plc will target a minimum dividend pay-out ratio of 50 per cent of its distributable net income in the medium term, other than in 2021 where a pay-out ratio of at least 30 per cent will be targeted to take account of the renewal of the telco's license.

MTN Rwanda registered an after-tax profit of Rwf20.2Bn in 2020 compared to Rwf6.81B in 2019, a growth of close to 200 per cent. The telco is projecting profit after tax of about Rwf23.7B in 2021.

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