Analysis: MTN wants to sell some of its financial assets to Nigerians - here’s how it will benefit you

MTN Nigeria signpost in Lagos (Biznews)
  • MTN Nigeria registers 20.3 billion ordinary of N0.02 each for its Listing by Introduction on NSE
  • Ferdi Moolman, MTN Nigeria CEO, says the telecoms giant is engaging the NSE to complete listing process.
  • Listing by Introduction means the company will allow shareholders to sell already existing shares and trade on local bourse.
  • Business Insider SSA by Pulse analyses the whole listing processes - why MTN is listing, the value it is listing and the benefits of the listing on the citizens and economy.

MTN Nigeria is going ahead with the Listing by Introduction and says it has successfully completed the registration of 20,354,513,050 ordinary shares of N0.02 each with the Securities and Exchange Commission (SEC).

Ferdi Moolman, MTN Nigeria CEO, commented: “I am excited we have achieved another milestone in our listing process and want to thank the SEC and the Corporate Affairs Commission (CAC) for supporting us through the process. We have now begun to engage with the Nigerian Stock Exchange (NSE) to complete the listing process.”

The flip side – and regulatory hurdles

The listing is part ofgovernment’s requirements arising from negotiations after the telecom firm incurred a record $5.2 billion fine over its failure to deactivate 5 million unregistered SIM cards in 2015.

In April 2018, Prof. Umar Danbatta, the Vice Chairman of the Nigerian Communications Commission (NCC), said the telecom giant has paid more than 50% of the firm, putting the figure at N165 billion.

Otherregulatory sanctions include the “refund of a total $8.134 billion moved out of the country" for breaching the country's forex regulations and the $2 billion tax demand by the government.

In December 2018, MTN and the Central Bank of Nigeria (CBN) reached an out of court settlement on the $8.1 billion alleged illegal repatriation saga while the tax demand case is still pending in court.

What it means to Listing by Introduction and not IPO

Unlike Ghana, where MTN local unit listed through Initial Public Offering (IPO), the telecom giant will list on the Nigerian Stock Exchange (NSE) by Introduction.

Here, IPO is a way of listing new shares (financial assets of a company) while Listing by Introduction means the company will allow shareholders to sell already existing shares or those already been listed on another exchange.

So, for the MTN listing, no new shares will be issued and no additional funds will be raised but the telecoms firm will start trading on the Nigerian market. The telecoms giant has registered 20.3 billion ordinary shares of N0.02 each.

No further terms or documents for the listing yet as it is currently engaging the Nigerian Stock Exchange on the listing process.

What is Share?

A share gives the buyer voting rights and power during AGM and other important events and allocates some portion of the company’s finances.

Can someone buy shares on Listed by Introduction?

Yes, but investing in any company’s shares or stock is risky but you can make a short run profit if you have a good stockbroker.

If you want to invest in MTN Nigeria shares or any other stocks, the first step is to read the listing document or prospectus of the company to understand its business nature, its performance, market outlook and dynamics, find out any corporate action being taken recently (e.g. a stock split, dividend distribution, debt or an acquisition) and any possible risk factors). These are always usually explained in the company's prospectus.

How stock will aid the Nigerian economy and help citizens

For the economy, listing shares on the country's bourse help to facilitate domestic investments as well as foreign direct inflow which further deepen development and growth. 

The capital thus raised by businesses are then used to produce goods and services that not only creates jobs but also adds value to our economy by adding to its GDP.

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