The long-awaited initial public offering (IPO) of MTN Nigeria Limited will eventually happen sometime next month, reliable sources familiar with the situation has confirmed to Nairametrics.
According to our source, the August date follows the eventual permission granted the company by the Securities and Exchange Commission (SEC) to go ahead with the listing of its shares on the Nigerian bourse.
A long awaited and highly speculated IPO
Talks about the IPO have dominated business reports throughout the year, with rife speculations about the actual details/entailment.
Earlier report had it that the MTN shares’ listing would happen in June 2018. There have also been conflicting reports about the exact amount the company wants to raise through the IPO, including report that it was hoping to raise about ₦100 billion.
Last month, an MTN spokesperson debunked rumours that MTN had ever hinted at issuing as much as $500 million-valued shares during the IPO.
The spokesperson also stated that MTN Nigeria Limited has yet to fix a definite date for the IPO, while noting that all information pertaining to that would be made known at the right time.
Meanwhile, MTN Group’s President/CEO, Rob Shuter, did confirm to Bloomberg that the IPO will happen before the end of the year. He, however, gave no further details about when that will be happening or how much the company hopes to raise.
As expected, many of the company’s current and potential investors/shareholders have been affected by the long delay, even as they have also complained about being left in the dark on issues pertaining to the impending IPO.
30% free float for retail investors
The IPO will also target retail investors with about 30% ordinary shares, a good development considering that a reasonable amount of the company’s shares will go to the investing public.
As we reported, this amount of free float is above the 20% free float (translating to about ₦40 billion) listing requirement expected of companies by the Nigerian Stock Exchange (NSE).
In the meantime, MTN Nigeria is proceeding with all the necessary preparations for the IPO. The company may list 20 billion shares after a 1 for 5 share split, after which it will proceed to pick the IPO price through book building. MTN Nigeria has a current valuation of $5.2 billion, going by its current over the counter price of $13, the nominal value of the shares will also be split from ₦1 to 2 kobo.
Note that proceeds from the IPO will be used to redeem preference shares issued to existing investors who bought the shares 11-years ago. It will also go towards cutting the company’s dollar exposure, and as part of the fulfilment of sanctions slammed on it in 2015 by the Nigerian Communications Commission (NCC).