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MTN: CBN order, poor Ghana results dim prospects of Nigerian IPO


Analysts say IPO could be delayed until 2020

By Tajudeen Hamzat


The $8.1billion sanctions placed on four Nigerian banks (and MTN) by the Central Bank of Nigeria, CBN over their reported involvement with what the apex bank has described as the irregular repatriation of funds on behalf of MTN Nigeria and the less than satisfactory showing of MTN Ghana in the results of the Initial Public Offer to sell shares of the company in the West African nation to the investing public, may have dimmed the prospects for the coming into force soon of the long awaited MTN Nigeria IPO.

Following on the Nigerian banks’ sanction, MTN shares had recorded a 19 per cent drop in value when trading opened at the Johannesburg Stock Exchange on Thursday.

And back in Ghana, only 1.5billion of the 4.5 billion shares offered to the subscribing public in the IPO scheme was taken up.

While the company continues to publicly insist that it is yet firming up plans to commence the Nigerian offer, analysts say that its strategists are clearing watching out for all of the flowing economic headwinds with a view to ensuring that it does get the best deal possible when the offer comes up on the Lagos Stock Exchange.

Along this line then, the thought is that given the current state of the Nigerian economy, the forthcoming elections season and the traditional need to allow a new government time to settle in, the Nigerian IPO offer may not take place until perhaps early 2020.

On the flip side however, the MTN Ghana IPO listing now opens the door for the company to now be formally listed on the Ghana Stock Exchange from September 5 while the total cash raised ($236m or 1.1b cedis) from the subscription also breaks the existing Ghanaian record for the IPO that has raked in the highest cash value yet.

The previous record had been set in December 2016 by the Agricultural Development Bank Ltd. which had raked in 326m cedis from its own IPO then.

MTN Nigeria which has since pleaded its innocence in the current sanctions saga is however not a stranger to regulatory sanctions in Nigeria having been involved in a $1billion settlement over unregistered SIM packs in 2016.



Rob Shuter, Group CEO, MTN Africa




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