MTN Nigeria eyes debt and equity sale after stock market listing

0
324
MTN Annual Results at their head office in Johannesburg on Thursday, March 8 2018. CEO,Rob Shuter spoke at the announcement of the results along with CFO, Ralph Mupita. Pic: Waldo Swiegers / Bloomberg

targets dividend payout ratio of at least 80%

ABUJA, May 15 – MTN Nigeria is arranging local debt financing and plans to sell shares to new investors through a public offering, after listing its shares in Africa’s biggest economy on Thursday.

Nigeria, MTN’s biggest market with 52.3 million users in 2017, accounts for a third of the South African group’s annual core profit, but it has faced problems in the country in recent years.

In December, MTN agreed to make a $53 million payment to resolve a dispute in Nigeria. The move ended a multi-billion dollar dividend repatriation row, hitting its share prices in Johannesburg.

MTN, owned by South Africa’s MTN Group, has been one of the main beneficiaries of Nigeria’s push to liberalise its economy over the past two decades. But it has come under increased pressure from the government to boost local ownership.

MTN Group CFO, Ralph Mupita said the listing was an important step towards increasing local ownership in MTN Nigeria and building the country’s equity capital markets.

The company also said it was relying on local funding in naira to mitigate exchange rate volatility.

MTN Group said the company has received approval from the Nigerian Stock Exchange to list its shares on Thursday, giving its existing shareholders access to trade their shares on the bourse.

The company also said the Nigerian unit will raise debt, adding that the total level rose 44% to 252 billion naira ($823.66 million) in the first quarter.

“This is just the beginning, we still intend to pursue a future public offer giving more Nigerians greater access to the MTN opportunity,” Ferdi Moolman, chief executive of MTN Nigeria, said.

MTN decided to list its local company in Nigeria in 2016 after agreeing to pay a $1.7 billion fine to settle a SIM card dispute with the government. Earlier, the company said it planned to list in the first half of 2019.

MTN Nigeria said last week it would list 20.4 billion ordinary shares on the Nigerian stock market.

The company said capital expenditure in the first quarter, rose to 63 billion naira, the bulk of which went to upgrade its network, up from 18 billion naira same period last year.

Service revenue grew 13.4% to 282 billion naira in the first quarter, driven by a rise in voice and data income and the addition of 2.1 million mobile subscribers.

Earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of operating profit, reached 150.4 billion naira ($492 mln) in the three months to March 2019, up from 123 billion naira a year earlier, MTN said.

MTN said it targets a dividend payout ratio of at least 80% of its net income in the medium term. ($1 = 305.95 naira)

SHARE
Previous articleHow Nigeria Can Avert a Looming Tsunami of Poverty
Next articleMTN Nigeria targets dividend payout ratio of at least 80% to investors
Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.