You need at least N$1 700 to buy MTC shares

AN offer to buy Mobile Telecommunications Limited (MTC) shares is finally open, with one share going for N$8,50, and a minimum of 200 shares to be bought.

This brings the minimum investment amount to N$1 700.

Investors who would like to buy more than 200 shares would be required to do so in portions of a 100.

This means for every additional share portion to be bought on top of the 200, one would need at least a further N$850.

The initial public offer has been long awaited, with the internet buzzing after the release of the listing prospectus, which is available in English only.

The listing of MTC’s 49% share is the largest proposed listing by a Namibian company since the establishment of the Namibian Stock Exchange (NSX) and will have Namibia Post and Telecommunications Holdings Limited (NPTH) retaining a 51% share.

Of this offer, MTC will sell 367 million shares and expects to rake in N$3,1 billion for the state, who is the ultimate shareholder.

To allow affordability, the company split its shareholding thin in a 1:30 ratio – and now has a 750 million authorised share capital.

Without the split, MTC would have only over 12 million shares on offer, and keeping the expected inflow constant, one share would have cost anything between N$244,90 and N$285,71.

According to the prospectus, the board of directors, led by Theo Mberirua as the chairperson, accepts, collectively and individually, full responsibility for the accuracy of the information contained therein.

The offer is only active in Namibia.

It has been awaited by many, and the Government Institutions Pension Fund, which is known for splashing billions on Namibian companies which list, has indicated it would participate.

MTC is expected to be listed on the NSX on 19 November this year, under the code MOC.

Share certificates are expected to be available for collection on or about 31 December this year.

Shares can be bought by individuals as well as companies and other legal entities.

According to minister of public enterprises Leon Jooste, there were three main reasons why the government decided to list MTC.

The first is to develop Namibia’s financial sector by putting to use Namibia’s billion-dollar savings pool.

The other objective, according to Jooste, was for the listing to provide liquidity for the country’s coffers that are constantly filled with debt.

The inflow of N$3,1 billion is expected to improve the government’s ability to rebuild its debt profile.

The last objective Jooste stated was that MTC’s listing would broaden economic participation through ownership by ordinary Namibians in a profitable public entity.

Jooste said there are no plans at this stage for the state to further reduce shareholding listing of 49%.

In the event that the public offer is oversubscribed, MTC has said the order of the allocation process will go first to previously disadvantaged Namibians, then to MTC staff and customers, followed by Namibian natural persons and corporates, and finally to Namibian institutions, the Southern African Development Community, and international investors.

Simonis Storm Securities analysts say the “long-term view is a bit murky, as we would like to know where tangible growth would originate from. Unfortunately, we do not see it all the way through as per the prospectus, e.g. Paratus Namibia remaining a strong competitor within the internet/fibre space locally and the threat of other international competitors (MTN)”.

MTC’s only competition after listing in a local context would be Paratus Namibia Holdings, whose shares closed off last week at N$12 a share.

The MTC offer opened yesterday and will close on 1 November.

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