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MTN Nigeria Mulls Sale of 30% Equity to Retail Investors

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MTN Nigeria, largest telecommunication company, may sell some 30 per cent of its ordinary shares to Nigerian retail investors under its much-awaited initial public offering (IPO).

 

Sources in the know of the arrangements for the IPO indicated that MTN Nigeria could sell as much as 30 per cent of its share capital to the investing public to ensure substantial number of the company’s shares is freely available in the hands of minority retail investors.

 

MTN Nigeria plans to raise between $400 million and $500 million through an IPO scheduled for the second half of this year. The company had in 2016 appointed the advisory team and set out a roadmap towards listing on the Nigerian Stock Exchange (NSE) in 2017.

 

Its board had announced the appointment of Stanbic IBTC Capital Limited and its affiliates, Standard Bank of South Africa Limited and Standard Advisory London Limited and Citigroup Global Markets Limited, as the joint transaction advisors and joint global co-ordinators for the proposed listing of MTN Nigeria on the NSE. The telco, however, missed the 2017 target.

 

Sources said MTN Nigeria plans to have a free float of some 30 per cent, significantly above the minimum listing requirement at the NSE. Free float, otherwise known as public float, which refers to the number of shares of a quoted company held by ordinary shareholders other than those directly or indirectly held by its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; its directors, who are holding office as directors of the entity and their close family members and any single individual or institutional shareholder holding a statutorily significant stake. This is 5.0 per cent and above in Nigeria.

 

Thus, free float’s shares exclude shares held directly or indirectly by any officer, director, controlling shareholder or other concentrated, affiliated or family holdings.

 

MTN Group holds 75.8 per cent majority equity in MTN Nigeria. Public Investment Corporation Ltd holds 1.7 per cent. MTN NIC BV controls 2.8 per cent equity while Nigerian high networth investors hold about 19 per cent equity through many special purpose vehicles.

 

Sources said MTN Nigeria will use the IPO to dilute the current shareholdings and free up shares for retail minority shareholders. MTN Nigeria is expected to be listed on the premium board of the NSE.

 

Extant rules require companies on the premium board to have free float of 20 per cent or above N40 billion on the date the Exchange receives the company’s application to list. Companies on the main board is required to have 20 per cent of market capitalisation while companies on the third tier board, otherwise known as Alternative Securities Market (ASEM) are required to have 15 per cent free float.

 

A draft of a review of the free float rules undergoing rule-making process requires companies seeking to list on the premium board to have a free float of 20 per cent of the company’s issued share capital made available to the public and held by not less than 300 shareholders; or alternatively valued at N40 billion or more, or any value prescribed by the Exchange from time to time, on the date the Exchange receives the company’s application to list and shall maintain same as long as it remains listed on the Exchange.

 

Stock markets maintain minimum public float to prevent undue concentration of securities in the hands of the core investors and related interests, a situation that can make the stock to be susceptible to price manipulation. Besides, it provides the general investing public with opportunity to reasonably partake in the wealth creation by private enterprises.

 

Market sources said they expected MTN Nigeria to proceed as scheduled later this year despite the recent downtrend at the stock market, noting that MTN Nigeria is a good offer that will always attract investors. Many investors were reported to have placed funds on standby in their investment accounts with stockbroking firms.

 

With more than 55 million subscribers, MTN Nigeria is the largest subsidiary in the MTN Group. Since inception in 2001, MTN Nigeria has led the growth in the voice market to become the biggest mobile operator in Nigeria and West Africa.

 

Many analysts believe that the MTN Nigeria’s IPO will be the pioneer to launch the electronic IPO in the Nigerian capital market. Already, stakeholders in the Nigerian capital market have commenced preparatory process towards the full automation of IPO and other public primary offers in the Nigerian market.

 

The full automation of primary issuance will involve automation of the process, approval, documentation, subscription and allotment of all issues, especially IPOs and public offers. With this, investors will be able to subscribe and make payment for IPOs and public offers online with such orders being matched and allotted electronically and directly to the investment accounts of the investors at the Central Securities and Clearing System (CSCS).

 

The full automation will enable the primary market to operate within a designated transaction cycle, possibly within the T+3 four-day trading cycle currently being operated at the secondary market.

 

Investors will also be able to monitor and change their orders within a designated period while subscribers with personal access to the internet and online stockbroking trading portals can make direct subscriptions from anywhere.

 


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ATCON Offers Solutions to Fibre Cable Cuts in Telecom Industry

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Association of Telecommunication Companies Of Nigeria (ATCON) has highlighted fibre cuts as a major stumbling block to the Nigerian telecom sector’s growth and affirmed its readiness to take strategic measures to tackle submarine fibre disruption in the country.

ATCON Offers Solutions to Fibre Cable Cuts in Telecom Industry

Tony Emoekpere, president of ATCON, at the first edition of ATCON’s Critical Conversation Breakfast Meeting held in Lagos with the theme: ‘the Direct And Indirect Cause And Impact Of Metro, Terrestrial And Submarine Fibre Disruptions (Cuts)–Short, Medium And Long Term Sustainable Solutions’, stated that, operators cannot continue to pay lip service to issues and challenges that have constituted stumbling block to the telecom sector growth.

The president recall that few months ago, there was a reported case of submarine cuts which significantly impacted Nigeria and some African countries, adding that, “The incidences of Metro, Terrestrial and Submarine Fibre Disruptions have become a recurring decimal which must be addressed by relevant agencies at all levels of government. Our members have had to pay a substantial amount of money to have all these disruptions fixed and this is impacting on their operational expenses which should not be if the perpetrators are brought to book.”

On advocacy, the president said ATCON is seeking ways going forward, adding that ducts should be built when new roads are being constructed. “There is a need to enforce and implement the provision in the Nigeria National Broadband Band Plan 2020-2025 which states that NCC should have a desk officer in each state of the Federation who is expected to be in charge of the fiber network in order to minimize Fiber cuts during roads construction,” he recommended.

The president averred that the telecom sector has been reported to contribute over 14 per cent to the nation’s GDP, adding that, the sector could have done much better if issues like fiber disruption which has constituted a threat to the manifestation of its inherent potentials, is dealt with.

Emoekpere however stressed the need for more collaboration between telecoms operators and government, with developers and road contractors to mitigate the challenges of fiber cuts.

“There must be compensation for fibre cable cuts. Training and awareness creation on the importance of fibre cable and the danger and negative impact of fibre cable cut, cannot be overemphasised. The federal government should declare telecoms assets as Critical National Infrastructure (CNI).

“Government should come up with policies like ‘Dig Once Policy’ for the implementation of fibre laying to avoid operators damaging cables of other operators during cable laying. There must be a clear database of government agencies giving approvals for road construction to enable telecom companies to have an idea of who they are dealing with as well as the need to have a status update on task responsibilities of ATCON for a follow-up of ATCON activities,” he advocated.

In the same vein, Lekan Balogun, CEO of NetAccess, said, the major causes of fibre cable cut includes Govt/Private Contractors, Man made, planning and Design and Natural causes, while stressing that, there is need for constant engagement between ATCON members, the government and developers.

Balogun proposed short, medium and long term recommendations to forestall fibre cuts, adding that the use of protective materials like metals rather than plastics will help protect the cables from unwanted cuts.

Credit: Leadership


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Starlink now 3rd Largest ISP in Nigeria – NCC

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Starlink, Elon Musk’s Internet company, has emerged as Nigeria’s third-largest Internet Service Provider (ISP) with 23,897 subscribers in the fourth quarter of 2023, according to latest ISP data released by the Nigerian Communications Commission (NCC) on Monday.

Starlink now 3rd Largest ISP in Nigeria – NCC

According to the NCC data, Starlink’s active customers in Nigeria surged 113 per cent in Q4 2023, from 11,207 customers in the previous quarter, establishing it as one of the leading ISPs in the country.

Spectranet, one of the oldest ISPs in the country, maintained its top position in the market with 113,869 active customers.

FiberOne followed in second place with 27,000 active users at the end of 2023.

ISPs are different from mobile Internet providers, like the telcos such as MTN, Airtel, etc.

They provide Internet through various wired technologies, such as DSL, cable, fibre-optic, or satellite connections. They use fixed infrastructure that requires a physical connection to the home or business.

Starlink launched its services in Nigeria in January 2023, becoming the first African country to receive the service, more than 20 months after SpaceX met with the NCC to outline their deployment plans.

Meanwhile, Spectranet, one of the oldest ISPs in the country, maintained its top position in the market with 113,869 active customers.

FiberOne followed in second place with 27,000 active users at the end of 2023.

ISPs are different from mobile Internet providers, like the telcos such as MTN, Airtel, etc.

They provide Internet through various wired technologies, such as DSL, cable, fibre-optic, or satellite connections.

They use fixed infrastructure that requires a physical connection to the home or business.

Starlink launched its services in Nigeria in January 2023, becoming the first African country to receive the service, more than 20 months after SpaceX met with the NCC to outline their deployment plans.

As of September 2023, just 8 months after its launch, Starlink had amassed 11,207 active subscribers in Nigeria, making it the fourth largest ISP in the country.


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Airtel Africa Completes $550m Bond Repayment

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Airtel Africa, telecommunications and mobile money services provider, has revealed that its subsidiary, Bharti Airtel International (Netherlands) B.V., has repaid in full its $550m bond maturing Monday.

Airtel Africa Completes $550m Bond Repayment

 

This was disclosed in a corporate filing with the Nigerian Exchange Limited (NDX) signed by G Simon O’Hara, group company secretary, on Monday.

With this repayment, the company said that it had achieved a zero-debt position at the HoldCo.

The $550m bond was 5.35 per cent Guaranteed Senior Notes.

“This bond repayment of $550m has been made exclusively out of cash reserves at the holding company and is a continuation of its strategy to reduce external foreign currency debt. At the time of the IPO in June 2019, the group had $2,719m of external debt at HoldCo which resulted in significant exposure to currency fluctuations and the reliance on upstreaming funds to cover both interest costs and the principal repayment.
“Through consistent execution of its strategy supporting strong free cash flow generation, and continued upstreaming success, the group has been reducing Holdco debt over the past few years and has now reached the significant milestone of a zero-debt position at HoldCo. The current leverage and capital structure is a reflection of the Group’s successful capital allocation strategy that has been in place since our IPO, and it will aim to continue reducing foreign currency debt obligations across its OpCo’s,” part of the statement from the telecoms provider said.


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