Some capital market operators on Tuesday attributed the delayed MTN Initial Public Offering (IPO) to the cloudy economic environment.
They told the NIGERIA NEWS in separate interviews in Lagos that the IPO had been dragging due to economic uncertainties.
IPO is a process through which a private company or corporation raises investment capital by offering its stock to the public for the first time.
Prof. Uche Uwaleke, the Head of the Banking and Finance Department, Nasarawa State University Keffi, said the IPO was being delayed because of the cloudy economic environment.
Uwaleke said that the company had made it clear that listing on the stock exchange would be subject to ‘favourable economic conditions.
He said that the company apparently was delaying the offer because they were yet to see favourable economic conditions.
Malam Garba Kurfi, the Managing Director, APT Securities and Funds Ltd., said that MTN was dragging the issue because of the way and manner things were being handled in the country.
“I will not be surprised if they come with another excuse to shift the offer to next year as there is nothing on ground to confirm their seriousness even though they have selected parties to the offer,’’ Kurfi said.
Kurfi said that MTN IPO in Ghana was ongoing, while the Nigerian market was left out.
“Ghana made it clear that no GSM provider would be given the right to 4G without being in the public but that is not the case in Nigeria,’’ he said.
Kurfi said that those in authority should learn from Ghana to avoid the future mistake.
MTN Group recently told NAN that it was perfecting the details of its proposed Nigeria IPO.
MTN Group Spokesperson, who pleaded anonymity, confirmed this in response to inquiries by NAN on why the company was yet to file applications for the proposed offer.
Both the Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) are yet to receive applications from the company for the offer.
The MTN representative said a detailed process and workstream on the IPO were presently underway and would be announced at the appropriate time.
Speaking on the IPO process, the spokesperson said MTN had not made known the offer value contrary to the 500 million dollars being speculated in the media.
“To clarify some matters on the IPO process, no amount/value had been given by MTN Group or MTN Nigeria regarding the IPO and there was never a statement on a ‘proposed 500 million dollars IPO.’
“In the communication, we have issued to the market, we have noted that we expected this IPO process to be concluded during 2019 and there was not a specific date given,’’ the representative said.
There were reports earlier that MTN Group Ltd. was perfecting plans to raise about 500 million dollars from the sale of shares in its Nigerian business in the first half of 2019.
Standard Bank Group Ltd. and Citigroup Inc. had been advising the company on the disposal of as much as 30 percent of the Lagos-based unit on the Nigerian Stock Exchange (NSE).
MTN had agreed to list the Nigerian unit as part of June 2016 agreement to pay one billion dollars fine for missing a deadline to disconnect unregistered subscribers amid a security crackdown.
MTN recently appointed a Nigerian investment firm, Chapel Hill Denham, as lead manager for the planned sale of 500 million dollars shares in its Nigerian business.
It also appointed South Africa’s Rand Merchant Bank, Renaissance Capital, and Vetiva Capital as joint issuers to the offer.
The telecoms firm also appointed seven placement agents that would help market the shares.