MTN ups stake in Nigerian unit

JOHANNESBURG – South African cellphone operator MTN will increase its stake in MTN Nigeria to 81 per cent by buying a seven per cent stake in the business for US$348,93 million, the group said yesterday.

MTN said it would pay US$287,76 million in cash and issue 6,093 million ordinary shares as payment for a 6,98 per cent share of MTN Nigeria. Around US$15,08 million of the cash payment will be used to offset a portion of outstanding loan accounts held by minority shareholders, reducing the cash obligation to US$272,69 million.A Johannesburg-based analyst said the price might be a little steep.”I think they are overpaying a little bit, but from a valuation and a forecast point of view, the impact is negligible,” said the analyst, who declined to be named.The group, sub-Saharan Africa’s biggest cellphone operator, said the acquisition of the stake would enable minority shareholders to realise a portion of their investment in MTN Nigeria – the leading mobile operator in the oil-rich West African country.”The acquisition is part of a process that will facilitate a broader spectrum of Nigerians to participate in the performance of MTN Nigeria,” MTN Chief Executive Officer Phuthuma Nhleko said in a statement.The sellers include Celtelecom Investments Limited, Celtel Funded Shares Limited, Universal Communications Limited, SASPV Limited, N-Cell Limited, Hermitage Overseas Corporation, Mobile Communications Holding Limited and Mobile Communications Invest Limited.The Nigerian MTN operation was launched in that country in 2001 and is the leading GSM operator in Nigeria, with over 9,6 million subscribers.MTN has pursued an acquisition spree that culminated in a US$5,5 billion purchase of Investcom in May, which made it the second-biggest operator in Africa and the Middle East amid booming demand in some of the last untapped mobile markets.The group operates in 21 countries in Africa and the Middle East and had 31 million subscribers across its operations at the end of June this year.Nampa-ReutersAround US$15,08 million of the cash payment will be used to offset a portion of outstanding loan accounts held by minority shareholders, reducing the cash obligation to US$272,69 million.A Johannesburg-based analyst said the price might be a little steep.”I think they are overpaying a little bit, but from a valuation and a forecast point of view, the impact is negligible,” said the analyst, who declined to be named.The group, sub-Saharan Africa’s biggest cellphone operator, said the acquisition of the stake would enable minority shareholders to realise a portion of their investment in MTN Nigeria – the leading mobile operator in the oil-rich West African country.”The acquisition is part of a process that will facilitate a broader spectrum of Nigerians to participate in the performance of MTN Nigeria,” MTN Chief Executive Officer Phuthuma Nhleko said in a statement.The sellers include Celtelecom Investments Limited, Celtel Funded Shares Limited, Universal Communications Limited, SASPV Limited, N-Cell Limited, Hermitage Overseas Corporation, Mobile Communications Holding Limited and Mobile Communications Invest Limited.The Nigerian MTN operation was launched in that country in 2001 and is the leading GSM operator in Nigeria, with over 9,6 million subscribers.MTN has pursued an acquisition spree that culminated in a US$5,5 billion purchase of Investcom in May, which made it the second-biggest operator in Africa and the Middle East amid booming demand in some of the last untapped mobile markets.The group operates in 21 countries in Africa and the Middle East and had 31 million subscribers across its operations at the end of June this year.Nampa-Reuters