$8.1bn scandal: Uncertainty over MTN listing on NSE

The recent sanctioning of MTN and four banks over the illegal repatriation of $8.1bn from Nigeria to South Africa may have cast a doubt over the long anticipated Initial Public Offering (IPO) of the telco in Nigeria.

National Daily gathered that MTN had confirmed to some stakeholders at the weekend that the latest imposition on the company by the CBN has destabilized its ongoing plans on the IPO.

MTN was quoted as saying the ‘regulatory certainty’ needed for the IP to go ahead is not guaranteed.

Last Friday, MTN Group’s spokeswoman (Mimi Kalinda) also hinted at the uncertainty through email comments sent to Bloomberg. According to her: “Our IPO has always been subject to satisfactory market conditions and this event will potentially make it complicated for us to make it happen.”

Meanwhile, the Nigerian Communication Commission (NCC) recently gave MTN an ultimatum of May 2019 to list on the Nigerian bourse. Failure to do so could result in further consequences for the telco.

The requirement for MTN to list on the Nigerian Stock Exchange became necessary towards the settlement of a different regulatory controversy in which the telco was immersed back in 2015.

As repeatedly reported, the NCC initially imposed a fine of $5 billion on the company over unregistered Sims. But the sum was eventually reduced to $1 billion; on the proviso that MTN lists on the NSE.

As uncertainty now hangs over the IPO (the processes of which have already advanced to a reasonable extent), MTN Group is reportedly worried the NCC may re-impose the initial fine of $5 billion after May 2019.

Either way, Africa’s leading telco should indeed be worried. Asides the likelihood that it may not meet the May 2019 deadline, the company will struggle to refund the $8.1 billion which is about half of its market capitalisation.

As reported, the CBN ordered MTN on Wednesday to refund the $8.1 billion. It also imposed a N5.86 billion fine on the four banks that facilitated the alleged crime; namely Standard Chartered Bank, Stanbic IBTC, Diamond Bank Plc and Citibank.