MTN shares drop amidst U.S/Iran nuclear crisis
MTN shares fell as much as 4 percent on Wednesday, the most in more than a month, on concerns that cash would be stuck in Iran.
Although the shares recovered to trade 2.7 percent lower at 121.55 rand as of 9:48 a.m. in Johannesburg, the South African telecom giant said efforts to repatriate about 200 million euros ($237 million) from its Iranian unit will become tougher after U.S. President Donald Trump reinstated economic sanctions on the Islamic republic.
President Trump had declared on Tuesday that he was withdrawing from the Iran nuclear deal, unraveling the signature foreign policy achievement of his predecessor Barack Obama, isolating the United States from its Western allies and sowing uncertainty before a risky nuclear negotiation with North Korea.
The decision, while long anticipated and widely telegraphed, leaves the 2015 agreement reached by seven countries after more than two years of grueling negotiations in tatters. The United States will now re-impose the stringent sanctions it imposed on Iran before the deal and is considering new penalties.
So did France, Germany and Britain, raising the prospect of a trans-Atlantic clash as European companies face the return of American sanctions for doing business with Iran. China and Russia, also signatories to the deal, are likely to join Iran in accusing the United States of violating the accord.
Mr. Trump’s move could embolden hard-line forces in Iran, raising the threat of Iranian retaliation against Israel or the United States, fueling an arms race in the Middle East and fanning sectarian conflicts from Syria to Yemen.
Africa’s biggest wireless carrier by sales had more than $1 billion stuck in Iran due to U.S.-led sanctions that ended following a landmark agreement in 2015. Since that accord, the Johannesburg-based company has been steadily withdrawing the funds.
“We will continue to monitor the situation including the response of the Iranian authorities,” MTN said in a statement. The company has repatriated 88 million euros to date in 2018. In March, the wireless operator said it expected the last of the cash would be received by September.
Iran is MTN’s second-largest market with 43 million customers at the end of 2017. It has operated in the country since 2005.