MTN plans to sell N100bn stakes in its Nigerian division

MTN Group, the largest mobile operator in Africa, has announced plans to proceed with a public offer to sell 575 million shares in its Nigerian business unit.

The process to sell shares will be done by way of a bookbuild to institutional investors and a fixed price to retail investors, the mobile operator said on Thursday in a filing with the Nigerian Exchange Limited (NGX) where it is listed as the second most capitalized company.

Business Metrics calculated that when the announcement was made on Thursday, November 4, the share of MTN Nigeria was trading at N175.6. Thus, the value of the 575 million shares intended to be disposed by the group stand at N100.9 billion or $244 million.

According the filing seen by Business Metrics, the offer will open in November with a bookbuild to institutional investors, after which a fixed price will be announced for retail investors.  The offer is expected to close in December.

“This is the first step in our previously communicated statement of intent to sell down approximately 14 per cent of MTN Group’s current shareholding in MTN Nigeria,” according the statement signed by Uto Ukpanah, the company secretary.

As at the close of third quarter, the Nigerian telecoms regulator, Nigerian Communications Commission (NCC) reported that MTN had 73,566,926 active telephone subscriptions on its network and 58,412,242 of the number have access to Internet.

Business Metrics reported earlier that the telco posted N1.2 trillion revenue for the nine-month period spanning January to September, 2021. Its active data users expanded by 2.5 million to 33.2 million within the period.

Sales of data, voice, SMS and other services to Nigerians increased during the period under review despite the major slump in its mobile subscriber’s figure, which fell by 7.5 million to 67.5 million. The telco cited regulatory bottlenecks on new SIM activations and sales as the trigger.

Meanwhile, pre-tax profit jumped more than half to N321.4 billion, while profit after tax (PAT)  for the period stood at N220.312 billion, 52.7 per cent stronger than what was reported for the same period of last year.

Generally, the group’s subscription base rose by a net 200,000 to 271-million in the three months to end-September, held back by new SIM registration regulations in Nigeria. Stripping out Nigeria, subscribers were up 1.6 million

Active data subscribers rose by 4.1 million to 119.0-million, while active MTN Mobile Money (MoMo) customers increased by 2.2 million to 51.1 million. MoMo’s value of transactions was up by a staggering 67.2 per cent to $175.5 billion year on year.

“The MTN Group recorded a solid [third-quarter] 2021 trading performance, tracking positively against our medium-term targets with double-digit service revenue growth and the expansion of ebitda [earnings before interest, taxes, depreciation and amortisation] margins,” CEO Ralph Mupita said in a statement.

“This was delivered through solid commercial momentum and the ongoing execution of our Ambition 2025 strategy in challenging Covid-19 macroeconomic and trading conditions.”

Group service revenue was up 19 per cent, while the ebitda margin improved to 45 per cent from 42.9 per cent. Group ebitda was up by 24.1 per cent.