Billion Dollar MTN Nigeria IPO Now Imminent as Telco Converts to a PLC

After months of speculation, the Nigerian subsidiary of MTN, MTN Nigeria has finally sent its strongest signal yet that it intends to launch on the Nigerian Stock Exchange. Today Wednesday, MTN Nigeria announced it has concluded its conversion from a private company to a public limited company (PLC).

The conversion is an important legal requirement that signals the telco is well and truly now ready to debut on the stock market.

“Our conversion to a Plc is a major step towards listing by introduction on the Nigerian Stock Exchange in the first half of 2019,” says MTN Nigeria CEO, Ferdi Moolman.

“It is a reaffirmation of our long-term commitment to expanding investment opportunities for Nigerians, in addition to providing everyday services to them,” he says.

Primarily, there are few differences between a private company and public limited company. For instance, private companies have limited means of raising funds and cannot sell shares on the stock market. But public companies (PLCs), can raise funds from a variety of investors and importantly it can list on the stock market as a publicly traded company.

Additionally, private companies are under no legal requirement to reveal financial information to none shareholders. Whereas, all public companies are regulated by the SEC and they must adhere to regulations and reporting standards.

Also, with this move, MTN Nigeria is on course to fulfill its part of an agreement it signed with Nigeria’s NCC. Way back in 2015, MTN was accused of failing to deactivate millions of unregistered sims. This allegation was quite serious because, according to the NCC, it compromised Nigeria’s National Security and made the country vulnerable to different criminal elements.

Industry regulator responded with a hefty trillion naira fine. The move nearly crippled MTN Nigeria’s finances and put a huge question mark on the finances of its parent company MTN SA.

But a deal was struck, which led to the devaluation of the fine to around N330 billion. However as part of the deal, MTN was required to list its Nigerian subsidiary on the Nigerian Stock Exchange.

After more than 3 years, this listing is still in the works. Expectations had been high in 2018 with many expecting the telco to list that year. But the move was postponed as MTN Nigeria suffered dual shocks from two fines worth $8.1 billion.

However, MTN Nigeria looks set to debut on the bourse later this year. And according to Mr Ferdi, MTN looks “forward to continuing its engagement with the SEC and NSE to take forward the listing process.”