MTN: 8,458 0 (0.00%)
MTN says $10.1 bln Nigeria demand makes local listing challenging
(Adds further details, background)
By Alexis Akwagyiram and Didi Akinyelure
LAGOS, Sept 12 (Reuters) - A $10.1 billion demand by
Nigerian authorities from South African telecoms group MTN
makes its planned debut stock market listing in the
country "pretty challenging and awkward", the group's chief
financial officer said on Wednesday.
Nigeria's central bank has asked MTN to repatriate $8.1
billion in monies sent abroad, claiming the funds were sent
without proper certification. The company is also facing a $2
billion tax demand.
MTN has denied any wrongdoing.
Ralph Mupita said preparation of the company's initial
public offering (IPO) prospectus is far advanced.
"We are not sitting here saying the listing is off. The
listing is to remain on track," he told CNBC Africa television.
"It makes the IPO that we had planned pretty challenging and
awkward but we have got to explore other options of continuing
to meet the listing requirements," he said.
MTN has said it will engage with the central bank over the
demand. It said the monies sent out of the country were equity
Sources have told Reuters that the scale of the central
bank's demand affects market conditions, casting into doubt the
likelihood that the listing process would be completed by the
end of the year, if at all.
Shares in MTN fell nearly a third in Johannesburg in the
days after the central bank issued its demand on Aug 29. Mupita
said the shares were oversold and trading below broker
consensus. MTN's shares were down 2.78 percent at 1800 GMT on
Mupita said MTN was committed to Nigeria and would stay in
the country, adding that the company was looking forward to an
amicable resolution to the matters. Nigeria is MTN's biggest
market, accounting for a third of its annual core profit.
Some political analysts see politics as a factor in the
pressure on MTN, as Nigerian President Muhammadu Buhari, who
took office in 2015 on promises to push through tougher
regulation, is seeking re-election in 2019.
MTN's latest troubles come about two years after it agreed
to pay more than $1 billion to settle a dispute over SIM cards
in Nigeria, whose finances have been hit by a weak economy and
volatile global oil prices.
Mupita said the listing was part of the conditions it had
committed to meeting as part of the settlement of the previous
fine. He said the company saw no connection between its present
challenges in Nigeria and that fine.
MTN was working with local and foreign advisers on how to
carry out the listing, Mupita said.
In response to the tax demand, MTN filed a lawsuit in
Nigeria on Monday against the country's attorney general aimed
at protecting its assets. It is also seeking 3 billion naira
($10 million) in damages from the West African country in court
and legal expenses.
"We are going to engage with a variety of authorities,"
Mupita said. "We will seek engagements at the highest level in
the central bank and AGF."
(Additional reporting by Paul Carsten in Kano; Writing by
Chijioke Ohuocha; Editing by Jan Harvey)
First Published: 2018-09-12 20:22:58
Updated 2018-09-12 21:09:23
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