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MTN Nigeria Plans July IPO Listing at N80 Per Share

By Dipo Olowookere

A first major Initial Public Offering (IPO) on the Nigerian Stock Exchange (NSE) may eventually happen in July 2018, if information by Reuters in anything to go by.

Leading GSM network service provider in the country, MTN Nigeria, is finally set to list its much-anticipated shares on the local bourse.

According to the pre-IPO presentation of the telecoms firm seen by Reuters, MTN Nigeria, which plans to achieve a “retail friendly” offer price for the IPO in July this year, is looking at around N80 per share, the average price for shares listed on the NSE.

The telco has around 402 million shares in issue, the same amount in preference shares, which it sold at $0.99 in 2007.

As part of the IPO, it would split one share into 50 units, to create 20 billion shares, which would be listed on the bourse and set the IPO price via book building.

It would also split its nominal value to 2 kobo from one Naira.

South Africa’s MTN owns more than 70 percent of MTN Nigeria, which has under 300 existing shareholders.

In all, MTN plans to list its Nigerian unit worth $5.23 billion and will raise fresh funds to reduce debt.

It was gathered that the firm aims to raise at least $400 million from the IPO to pay preference shareholders.

To achieve this, MTN Nigeria is preparing to file application to the Securities and Exchange Commission (SEC) to launch the offer after getting approvals from existing investors last week.

Between May and June this year, the company plans to go on roadshow before the main listing in June or July with Citigroup and Stanbic IBTC Bank advising MTN Nigeria.

MTN shares are currently traded over-the-counter in Nigeria at $13, giving it a market value of $5.23 billion, down from $25 billion in 2015 before a Nigerian government fine.

The company would use the proceeds of the share sale to redeem preference shares issued to existing investors who bought the shares 11-years ago and also cut its dollar exposure.

IPOs dried up in Nigeria after a 2008 crash wiped more than 60 percent off the stock market’s capitalization. The index has since recovered, gaining 42.3 percent last year and 11 percent so far this year but IPOs have yet to resume.

Meanwhile, MTN Nigerian declined to comment on the IPO.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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