MTN Uganda has announced that it will be selling 20% of its shares to the public through an Initial Public Offer (IPO).
The IPO details will be “released in due course”
The move by the South African company is aimed at ensuring broad-based ownership in its operating subsidiaries, according to a statement on Tuesday.
The listing will be the first since 2018 when Cipla Uganda listed on the Uganda Securities Exchange.
This is part of its compliance of the licensing regime where operators are required to go public with at least 20% of their shares.
“Last year June, 2020 , the Government of Uganda through UCC renewed the National Telecommunication Operator Licence of MTN Uganda and thus extending its stay in Uganda on condition that they would sell 20% of its shares to the public of Uganda.
We as UCC are delighted to witness the honouring of this commitment,” Irene Kaggwa Sewankambo ,Executive Director Uganda Communications Commission said.
MTN is the first telecom to comply and the Chairman, Charles Mbire noted that listing was part of their localization plan too.
According to records, MTN Uganda contributes about 5% ($570m) of the total revenue ($11bn) of the MTN Group (as at end of 2020).
And as at the end of 2020, MTN Uganda had a profit of about $108m after tax.
Once the IPO details are released, a prospectus (what you would call a pitch document to potential investors) will be issued and it will include important disclosures on finances as well as operations and the future.
For the Uganda Securities Exchange, the MTN Uganda listing will be the 10th IPO.
The others are Cipla Uganda, Umeme Limited, DFCU Group, Stanbic Bank Uganda,BAT,Baroda, Uganda Clays,New Vision Group and National Insurance Corporation (NIC).
Apart from Uganda, the company has listings in Nigeria, Ghana and Rwanda, which to some extent took place after pressure from government and local regulators. The creation of a Lagos-listed entity was part of a deal to settle a multi-billion dollar fine for being slow to disconnect customers without proper documentation.
MTN is in the middle of a scaling back of the company, with the focus turning primarily to African telecom and mobile-banking services. The Johannesburg-based carrier abandoned its business in Syria and is looking to sell the Afghanistan and Yemen units. An upcoming initial public offering of IHS Holding Ltd. will allow MTN to reduce its stake in the pan-African towers company.