$10.1bn demand makes local listing challenging, says MTN
A $10.1bn demand by Nigerian authorities from South African telecoms group, MTN, makes its planned debut stock market listing in the country “pretty challenging and awkward,” the group’s chief financial officer said on Wednesday.
The Central Bank of Nigeria has asked MTN to repatriate $8.1bn sent abroad, claiming the funds were sent without proper certification. The company is also facing a $2bn tax demand from the office of the Attorney General of the Federation.
MTN has denied any wrongdoing.
Ralph Mupita said the preparation of the company’s initial public offering prospectus was far advanced, Reuters reported on Wednesday.
“We are not sitting here saying the listing is off. The listing is to remain on track,” he told CNBC Africa television.
“It makes the IPO that we had planned pretty challenging and awkward, but we have got to explore other options of continuing to meet the listing requirements,” he added.
Mupita said MTN was committed to Nigeria and would stay in the country, adding that the company was looking forward to an amicable resolution to the matters.
Nigeria is MTN’s biggest market, accounting for a third of its annual core profit.
Some political analysts see politics as a factor in the pressure on MTN as President Muhammadu Buhari, who took office in 2015 on promises to push through tougher regulation, is seeking re-election in 2019.
Meanwhile, MTN has said the AGF’s office exceeded its powers when it demanded that the company pay about $2bn in back taxes.
The attorney general “ought not to have undertaken an unauthorised process, which has caused undue, unwarranted and untold injury to” the company’s reputation, MTN said in legal documents seen by Bloomberg News on Tuesday. The operator is seeking N2bn in damages and a further N1bn in legal costs.
MTN’s share price has plunged by more than a third since the crisis erupted late last month. The dispute comes just over two years after the Johannesburg-based company settled a separate $1bn fine over improperly registered subscribers that was levied by the Nigerian Communications Commission.
The stock dropped by 2.8 per cent to 72 rand in Johannesburg on Tuesday.