Business Hilights
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Analysts at Codros Capital, others see planned MTN offer as game changer

Just as MTN group is gathering momentum to hit the Nigerian Stock Exchange (NSE) for listing and its Initial Public Offer (IPO) as soon as possible, feelers from market pundits had been in the greens.

Already, the telecom giant has appointed a Nigerian investment firm, Chapel Hill Denham, as lead manager for the planned sale of $500 million shares in its Nigerian business during the first half of this year.

Besides, South Africa’s Rand Merchant Bank, Renaissance Capital and Vetiva Capital were picked as joint issuers. The telecoms firm also appointed seven placement agents that would help market the shares.

In line with the buildup, MTN met with local and foreign analysts in Lagos at the weekend to help them understand its business and operations, ahead of the forthcoming listing.

Accessing the already created scenario at the market, the Head, Research and Strategy of Codros Capital Limited, Christian Orajekwe, agreed that it was a welcome development for the market because “MTN is a company with strong values and fundamentals.”

“More Nigerian investors would have the opportunity of participating in the company’s wealth creation. MTN is known to be profitable, and Nigerian investors would benefit from the capital appreciation and robust dividend that the company is bringing to the table.”

Speaking in a similar vein, the leader of a group of shareholders known as Constant Shareholders Association (CSA), Shehu Mikail, observed that “the listing would help deepen the market. He urged other telecoms and oil firms to join the league”.

“It is a very welcome development. It is to the advantage of operators. We expect other telecom firms as well as major oil companies, and companies in the power sector to join the train.

Also speaking, the Managing Director of High Cap Securities, David Adonri, noted that the shares, which are expected to be over-subscribed, would deepen the market if listed on the floor of the Nigerian Stock Exchange (NSE).“It is positive for the market. It would help to stimulate other telecom and oil giants to be listed on the floor of the exchange.”

However, leading opinion holder in the market and Chief Executive Officer of Capital Bancorp Plc, Mr. Aigboje Higo, disclosed that “The signs we get is that they are coming in the second quarter and it will be the biggest IPO in the history of the market. They will try and sell to as many as possible domestic and foreign investors”.

“It will further put the Nigerian market in the world scale; it will give Nigerians another opportunity to invest in a company that has benefited so much from this country. The last offer in the market was from Seplat in the oil and gas sector. This one from MTN is in the telecoms sector and it could be followed by other offers.

“If MTN is quoted, maybe other firms in the sector could join and be quoted. So it is something we are all looking forward to with excitement because it will change the landscape of the stock market for good.

Continuing, he stressed that the Nigerian stock market needs deep pocket investors like MTN, saying “We need them because we need more equities, we need more securities, we need increased capitalisation, we want more activities in the stock market and we want more investors. As big as Nigeria is, only five to seven million investors play the market. Their coming will attract people that have never looked at the stock market”.

Business Hilights recalls that the MTN Group Chief Executive, Rob Shuter, had told Reuters last week that the telecoms firm aimed to list its Nigerian unit on the Lagos bourse via an Initial Public Offering (IPO) this year.

His body language suggests that the IPO plans were well advanced and the company would provide exact terms in the next few months.

Details show that in the pre-IPO documents seen by Reuters in February, MTN aims to list its Nigerian unit worth $5.23 billion by July and raise funds to cut debt. It plans to raise at least $400 million from the IPO to pay preference shareholders and go on a roadshow between May and June.

Besides, MTN had long been working with Stanbic IBTC Capital, Standard Bank of South Africa, Standard Advisory London and Citigroup Global Markets, as joint advisors and global coordinators, with Stanbic acting as lead issuer.

MTN had planned to list its Nigerian unit in 2017, as part of a settlement with the Nigerian government over unregistered SIM cards for which it was fined $1.7 billion. It subsequently delayed the IPO due to market realities.