Chinwendu Obienyi
When MTN Nigeria said it was going to list on the Nigerian Stock Exchange (NSE), by way of introduction in the first half of this year, not many people were excited given that the telecom giant had already failed to do so in 2018 after raising investors expectations.
The promise to list on Nigeria’s bourse came as a result of the Nigerian Communications Commission (NCC) request that the company must list its shares on the NSE before its fine would be reduced significantly.
The NCC had fined the telecom company to the tune of $5.2 billion for its inability to disconnect unregistered SIM cards. In response to the fine, the telecom company filed for a plea to have its fine reduced and this was subsequently reduced to about $3.9 billion.
On June 10, 2016, MTN announced through its chief executive officer, Ferdi Moolman, that the sum of N300 billion (less than $1 billion) had been accepted as the final settlement of the fine demanded by the Federal Government for not disconnecting unregistered lines from its network after the deadline giving by NCC to all MTOs in the country.
He also added that the telecommunication company promised to list its shares on the NSE. Moolman said, “MTN will pay the NCC the sum of N330 billion in full and final settlement of the fine in line with an agreed payment plan as the last tranche of the bill will be paid on May 31, 2019”.
The Minister of Communication, Adebayo Shittu, confirmed the payment of $254 million, the first tranche of the three-installments settlement plan, noting that for the first year, MTN paid N80 billion, after paying the initial N50 billion, adding that they will have to pay for three years until they complete the N330 billion.
So when the Initial Public Offering (IPO) set for August 2018, did not happen, stakeholders in the industry got impatient especially with the Securities and Exchange Commission (SEC) issuing a statement then that it has not received the necessary papers for the long awaited IPO.
There were also concerns that the shares may not be sold to the public as stated in certain quarters as rumors swirling hinted that the shares may even be bought by investment companies that will then sell to investors with a lot of money as opposed to selling it to the public.
An analyst who pleaded anonymity at that time, told Daily Sun that the 30 per cent being listed by MTN is more than the 20 per cent free float required by the NSE from any company
She said the 20 per cent free float rule by the NSE was aimed at preventing undue concentration of securities in the hands of the core investors and related interests.
This meant that if the rule were taken into consideration, it would mean that apart from availing the investing public the opportunity to take advantage of the IPOs as a means of wealth creation, it would also hinder the possibility of stock price manipulation, which can occur when securities are concentrated in the hands of a few investors.
Coupled with market conditions and the negative vibe of the lead to the general elections which took place in February 2019, the IPO never materialised with investors who had been waiting for the said IPO, booking their profits, which led to the NSE All-Share Index (ASI) closing 2018 down by 17 per cent. This also raised serious doubts as to whether any of the telecommunication companies operating in Nigeria will ever list on the nation’s bourse.
However in March 2019, MTN on releasing its results for the year ended December 2018, disclosed that after several postponements, it has decided to list before the end of June 2019.
Moolman further noted that the listing will be done in two tranches; first, by the introduction and thereafter an IPO, adding that the company was putting things in place to ensure that its listing process would be hassle-free.
So when the Securities and Exchange Commission (SEC) confirmed to Daily Sun that it had received MTN’s application for registration of their existing securities, investors’ sat up and took positions. Preparatory to its listing, MTN Nigeria quickly completed its conversion from a private company to a public liability company (Plc).
The conversion to a Plc is a legal requirement and key milestone in the preparatory process for MTN’s listing by introduction on the nation’s bourse.
Speaking on the announcement, MTN Nigeria, boss Moolman, stated that the conversion to a Plc is a reaffirmation of the company’s long-term commitment to expanding investment opportunities for Nigerians, in addition to providing everyday services to them.
The company also announced that it had successfully completed the registration of 20,354,513,050 ordinary shares of N0.02 each with SEC, adding that the completion of the registration process set in motion the next steps in its intended listing by introduction on the Exchange.
For his part, Acting Director-General, SEC, Mary Uduk said: “The Securities and Exchange Commission can confirm that the application by MTN Nigeria to register their existing securities has been approved.
According to her, “MTN sought to come to the market by way of an introduction and they wrote to the SEC requesting for approval to register its existing shares. That approval has now been granted”.
“This is a further indication of the determination by the SEC to work with companies that are interested in the capital market. We believe that this will also encourage other service providers to come to the market,” she said.
Capital market operators have since lauded MTN Nigeria’s listing by introduction on the NSE’s platform,saying that it will deepen market liquidity.
Speaking at the listing ceremony in Lagos recently, Chief Executive Officer, NSE, Oscar Onyema, while expressing excitement, noted that the listing was a promising development in the country’s telecommunications sector and encouraged other players in the sector to explore the different opportunities in the capital markets for raising long term capital.
“As a listing platform of choice, MTN Nigeria’s listing will add to our bouquet of diverse investment offerings to the public. Having MTN Nigeria listed in our market is a testament of the exchange’s commitment to building a dynamic and inclusive market and creating channels for sustainable investment. He further added that the listing will promote liquidity for MTN Nigeria, enhance its value and increase transparency, as the exchange’s platform remains one of the best avenues for raising capital and enabling sustainable growth for national development.