MTN Group to sell 575m shares to Nigerian investors, issues N90bn bond

By Vincent Nwanma, Sunday Michael Ogwu & Zakariyya Adaramola   MTN Group, the parent company of Nigeria’s telecom giant, MTN Nigeria, which controls 40 percent market share, has concluded plans to sell 575 million units of its ordinary shares in MTN Nigeria to investors in the local market, it broke the news this morning, Thursday […]

By Vincent Nwanma, Sunday Michael Ogwu & Zakariyya Adaramola

 

MTN Group, the parent company of Nigeria’s telecom giant, MTN Nigeria, which controls 40 percent market share, has concluded plans to sell 575 million units of its ordinary shares in MTN Nigeria to investors in the local market, it broke the news this morning, Thursday 04 November 2021.

In a letter to the Nigeria Exchange, MTN Nigeria Communications Plc, said the public offer for sale will be by way of a bookbuild to institutional investors and fixed price to retail investors.

“The offer is anticipated to open in November 2021 with a bookbuild to institutional investors after which a fixed price is expected to be announced for retail investors also in November 2021,” MTN said, adding that it is expected to close in December 2021.

“This is the first step in MTN Group’s previously communicated statement of intent to sell down approximately 14% of its current shareholding in MTN Nigeria,” it said, even as the 575 million units expected to be on Offer this month represent 3.7 percent of the company’s shares outstanding.

Market analysts believe that this move by the telecommunications giant is a part of its stance to further democratise the company, with more Nigerian shareholders, a position mainly influenced by the Nigeria Communications Commission’s fine imposed on the company about six years ago.

MTN in 2016 committed to listing its ordinary shares publicly on the Nigerian Exchange, a commitment it fulfilled through the listing by introduction of 20.4 billion units of the ordinary shares of MTN Nigeria Plc at the price of N90.00 per share in May 2019.

The shares have since rallied 95.1 percent to N175.60 as at Wednesday 03 November 2021, a rally which is partly driven by the performance of the company and the limited float of the stock on the Nigerian Exchange.

Based on the company’s disclosure as at December 2020, 92 percent of the shares of MTN Nigeria was closely held by 13 shareholders, including the parent company which owns 76.8 percent in the Nigerian subsidiary through MTN International (Mauritius) Limited, leaving barely 8.01 percent of the company as float available for trading on the NGX and belonging to 8,349 institutional and retail shareholders.

Meanwhile, MTN Nigeria Communications Plc said it has completed the issuance of its N89,999,000,000 Series II 10-Year 12.75% Fixed Rate Bonds due 2031 under the N200 billion Bond Issuance Programme.

The book build process commenced on 8 October, 2021 and was completed on 15 October, 2021. 

A statement from the firm said during the book build, the total value of subscriptions received, peaked at N133,454,000,000, representing a 1.48 times oversubscription.

Commenting on the bond issuance, Chief Executive Officer of MTN Nigeria,  Karl Toriola said: “The bonds issued this year enable us to diversify our funding sources and extend the maturity profile of our debt portfolio. We are very proud of this landmark transaction and thank the investor community for their continued confidence in MTN Nigeria’s long-term strategy, our management team, and the overall telecoms industry”.

Also speaking, Kemi Awodein, Managing Director, Chapel Hill Denham said: “We are delighted to have led and completed MTN Nigeria’s N200bn Bond Issuance Programme with the pricing of the N89.999bn Series 2 bonds.” 

Chapel Hill Denham acted as Lead Manager and Bookrunner on the MTN debut and follow-on issuances of the first bonds issued by a Nigerian telecommunications operator further broadening Nigeria’s capital markets.