MTN Group plans to raise about $500m from the sale of shares in its Nigerian business during the first half of the year, fulfilling the terms of a deal struck with the West African nation to settle a record fine, according to people familiar with the matter.
Standard Bank and Citigroup have been advising Africa’s largest cellphone company on the disposal of as much as 30% of the Lagos-based unit on the Nigerian Stock Exchange, said the people, who asked not to be identified as the details are not public.
Most of the shares would be sold to local institutions and individuals, though foreign investors could be brought in to ensure the process was a success, one of the people said.
Discussions were ongoing and a final decision had not been made, they said.
Spokespeople for MTN and Citigroup in Johannesburg did not comment. Standard Bank did not immediately respond to calls seeking comment.
MTN agreed to list the Nigerian unit as part of a June 2016 agreement to pay a $1bn fine for missing a deadline to disconnect unregistered subscribers amid a security crackdown.
The penalty, originally set at $5.2bn, led to the resignation of the Johannesburg-based company’s CEO at the time, the group’s first ever full-year loss, and a slump in the share price that has yet to be clawed back.
The stock extended gains on Wednesday, and traded 4.5% higher at R128.83 at the close in Johannesburg, giving a market value of R243bn.
If successful, the Lagos share sale will be the biggest on the Nigerian Stock Exchange after Starcomms, which raised $796m when it listed in 2008, according to data compiled by Bloomberg.
MTN, Nigeria’s biggest mobile phone company with just over 50-million subscribers at end-September, slumped to a loss in 2016 as it absorbed the financial impact of the fine, though said last month it returned to profit the following year.
Nigeria and other sub-Saharan African governments are trying to gain more from international cellphone operators taking advantage of rising smartphone use and faster data speeds.
MTN has also agreed to sell shares in Ghana as one of the conditions of a deal to gain spectrum rights, while Vodacom, SA’s market leader, was ordered to list 25% of its Tanzanian business last year, raising $213m.
MTN had 230.2-million subscribers in 22 countries across Africa and the Middle East at the end of September, with Nigeria, Iran and SA its three biggest markets.