MTN strategizes for IPO in Nigeria …Says it will not hold back on investment in Iran

As part of its strategies to settle the over one 1.4 trillion fine imposed on the telecommunication giant, MTN by the Nigerian government in 2015, the company is contemplating raising more funds from the capital market through an initial public offer (IPO), just as it re-affirmed plans to make more investments in Iran.

The Chief Executive Officer of MTN Group, Rob Shute, while speaking with Bloomberg, said that the company is focused on laying the groundwork for an initial public offering of its Nigerian business and should complete the process in the next six months,.

“We have a lot of advisers running around getting everything ready. It’s a complicated process and there’s a lot of regulation that needs to be arranged. We are moving forward well with the project and anticipate concluding that in the next six months or so.”

MTN was penalized amount by the telecoms regulatory agency in Nigeria, Nigeria Communications Commission (NCC). The fine generated several uproar and was later reduced to N330 billion.

It saw imposed on the telecoms company for refusal to deactivate 5.2 million unregistered SIM cards on its network.

The fine led to the dismissal of some top management of the company in Nigeria. Shuter, 50, joined MTN in March after holding executive roles at Vodafone Group Plc in Europe.

He is the permanent replacement for Sifiso Dabengwa, who resigned after the Nigerian fine was imposed. Chairman Phuthuma Nhleko had run the company in the interim period.

However, the company has tried through various means to lobby for a soft landing and get the fine reduced to a reasonable amount.

The CEO has re-affirmed that he’s been “pleased” with MTN’s operation in Nigeria, the biggest of the Johannesburg-based company’s 22 markets across Africa and the Middle East.

Having paid N30 billion in December last year, after the initial deposit of N50 billion, making it N80 billon as at December last year, the current payment brings the total amount paid so far, to N110 billion, out of N330 billion.

Meanwhile NCC, in collaboration with the federal government, spread the payment in six tranches, after the initial N50 billion was paid.

The first two tranches, which were December 2016 and March 2017 had been paid, which includes the recent payment. The other four tranches are March 31, 2018 (N55 billion); December 31, 2018(N55 billion), March 31, 2019 (N55 billion) and May 31, 2019 (N55 billion).

MTN’s two other main countries are Iran and South Africa. In the former, Shuter said the company isn’t “holding back” on expansion plans even as U.S. President Donald Trump objects to the terms of a nuclear deal that led to the lifting of economic sanctions last year.

MTN has about 49.5 million customers in Iran, just under Nigeria’s 50.3 million, and has repatriated almost $1 billion from the country in the last 12 months.

“We are putting a lot of investment into the ground in Irancell,” Shuter said. “There is a huge demand for mobile data there, its one of our fastest growing data markets. It is business as usual.”

The MTN boss also informed that the company has no immediate plans to expand into new countries, but will instead focus on improving operations in existing markets, which include conflict areas such as Afghanistan and South Sudan.

The company needs to “build what we need to and get our networks into shape,” Shuter said. “In months to come I think there will be an opportunity to participate in the consolidation of the market.”

MTN shares rose 0.2 percent to 122.96 rand as of 10:53 a.m. in Johannesburg, valuing the company at 231 billion rand ($16.3 billion).