South Africa’s telecoms giant MTN is planning to fast-track the listing of MTN Nigeria on the Nigerian Stock Exchange after it reached a settlement to pay a penalty for missing the deadline to disconnect unregistered SIM cards.
MTN said on Friday that it had reached an agreement with the Nigerian Communications Commissions (NCC) to pay R25 billion over three years to settle the penalty for missing the deadline to disconnect unregistered SIM cards bringing an end to the crippling operational issue.
The deal follows eight months of talks between MTN Nigeria and the NCC, and with help from the attorney-general of that country.
MTN, which operates in 22 countries in Africa and the Middle East, soared 13.18 percent on the JSE on Friday to close at R140 as markets welcomed the news of settlement.
As part of the settlement, MTN agreed that MTN Nigeria’s shares would be listed on the Nigerian Stock Exchange as soon as commercially and legally possible after the date of carrying out of the settlement, the company said.
“We agreed to work expeditiously to see the listing come to pass,” MTN Group executive chairman Phuthuma Nhleko told journalists during a conference call.
“We do have 22 percent of the company trading over the counter in Nigeria.
“The listing was always anticipated. We will do it when the market conditions are conducive.”
The jury is still out on when the listing will become a reality.
“We have to ensure shareholders get fair value. At this stage there is no specific timeline for the listing. We will endeavour to do it sooner rather than later,” he said.
Nhleko allayed fears that MTN would cut capital expenditure (capex). “There is no intention to pull back or constrain capex as a consequence of the fine,” he said.
Despite the agreement MTN still needs to find a new chief executive and deal with the perceptions of a lack of credibility among management.
MTN is looking to replace Sifiso Dabengwa, its former chief executive, who resigned after the record fine.
Nhleko said the company was expecting to make an announcement of the new chief executive at the end of the second quarter.
“We said we are going to do our best to come back to the market with a new appointment at the end of quarter two,” Nhleko said.
MTN was criticised for Dabengwa’s R23.7 million golden handshake.
The fine saw MTN tightening its dividend policy over uncertainty over the fine imposed by the Nigerian government and the dollar liquidity situation facing that country.
Sibonginkosi Nyanga, an analyst at Momentum SP Reid Securities, said on Friday that resolving the penalty was positive. “They (MTN) have dodged the bullet. It’s a decent settlement but a high price to pay for operational loopholes,” he said.
“The fine is ring-fenced to the Nigerian operation and will be paid from proceeds from that market and we think it’s within the capabilities of the Nigerian operations,” Nyanga added.
MTN was paying a fraction of the fine as the original penalty was $5.2bn (R79bn).
The fine had weakened MTN’s share price by 25 percent since it was imposed in October and has placed pressure on its operations in Nigeria, its biggest market.
The Nigerian government imposed the record fine as a matter of public interest amid concerns that unregistered SIM cards could contribute to the spread of terrorism.