Home Cover Story MTN $1bn floatation excites market

MTN $1bn floatation excites market



An anticipated Initial Public Offer (IPO) of shares in telecommunications giant MTN has stirred investor interest. Shareholders are keeping vigil for firm news on when in the third quarter of the year Nigeria’s largest telecommunications operator would be selling its shares to the general public.

The company’s Group Chief Executive Officer, Rob Shuter, had hinted on the listing of the teleco last year.

He said the firm was making guided plans for an initial public offering of its Nigerian business, which would be completed in 2018.

“We have a lot of advisers running around to get everything ready. It is a complicated process and there’s a lot of regulation that needs to be arranged. But, we are moving forward with the project”, Shuter had said.

Shuter had told Bloomberg that he was pleased with MTN’s operations in Nigeria and looks forward to listing its stocks on the Nigerian Stock Exchange (NSE).

Reportedly, the South African firm had appointed Stanbic IBTC Capital Limited and its affiliates as transaction advisors, to undertake the spadework on the proposed listing.

The telecoms firm said Stanbic IBTC would be exercising the mandate together with its affiliates, namely The Standard Bank of South Africa Limited, the Standard Advisory London Limited and Citigroup Global Markets Limited.

This would also include some Nigerian receiving agents, banks and other advisers to be appointed in due course, as appropriate.

The Chief Executive officer of the NSE, Mr. Oscar Onyema had hinted that the exchange was expecting more listings in the 2018.

In 2018, the NSE will focus on rolling out its 2018-2021 strategic plan, which will position the NSE as a more agile and globally-competitive demutualized exchange, with a broader, diverse range of products and quality listings to meet the needs of our global investors and wider stakeholder community’’ said Onyema.

To this effect, market analysts believe that MTN must one of the prime companies that the exchange is persuading to take advantage of the listing window.

The company is believed to have expanded into most parts of the country covering the 36 states, and the Federal Capital Territory, Abuja. It has built capacities across villages, highways and cities and is recognized as the leading brand in Nigeria in its industry.

Getting the license cost MTN $285 million. It made that payment in January 2001. According to public documents, MTN has invested about $2 billion in building its network infrastructure in Nigeria.

The company has  a Market Capitalisation of $16.6 billion  as of May 2017 with over

19,989 employees.

The company said in the third quarter ended September 2017 that,

‘’MTN Nigeria continued to deliver healthy revenue growth of 11,2%, supported by 5,4% growth in voice revenue and 72,1% growth in

data revenue. Voice revenue growth was driven by effective price optimisation, increased minutes of use and higher interconnect revenue’’,

Sewa Wusu, Head, Research & Investment Advisory at Sterling Capital told Business Hallmark that the listing of MTN on NSE would be extremely positive for both the Nigerian market and its investors. Mr. Wusu said Nigerians have been clamouring for this development to enable them participate in being part owners of the telecom company’s which have been doing well in terms revenues among other key performance indices. According to Wusu MTN’s listing will not only get the NSE close to achieving its capitalisation target, but also benefit retail investors who are not able to invest in the company that has remained only for top end investors.

The Nigerian capital market had attained unprecedented level at N16.080 trillion  as at Wednesday January 17, 2018. Though the market capitalisation has slid back to N15.691 trillion on Friday January 25, 2018, strong indications have emerged that the market capitalisation may hit N20trillion this year. It is a bullish trend that is irresistible to any company that may want to list on the exchange.

This year alone the market has gained 14.3% while the market capitalisation has grown by 15.2 percent. Last year 2017, the major indicators, ALL Share Index and the Market capitalisation grew by 43 per cent and 49 per cent respectively. While the ASI climbed from 26,616.89 points early in the year 2017 to 38,243.19 points at the end of the year, the market capitalisation leaped from N9.1trillion to N13.6trillion. Sectoral indices also climbed equity escalators.

Dr Ogbonnaya Onu, Minister of Science and Technology had a few months ago, said the ministry would collaborate with MTN as it was her culture to uplift any brilliant idea to grow the nation.

“We commend MTN for its contribution to our economy. We will support you, study your proposal and make our own view, “” Onu said.

MTN is the biggest telecom company in Nigeria, competing with the likes of GLO and 9Moble.