MTN Uganda has announced a new exit option for its minority retail investors as the telecom company prepares to separate its mobile money business, MTN MoMo, from its main telecom operations. The move is part of a wider corporate restructuring plan under MTN Group’s “Ambition 2025” strategy. This strategy seeks to transform MTN into a digital-first business by focusing on its telecom services and expanding its financial technology (fintech) operations across Africa.
According to details released by MTN Uganda, the mobile money unit will be transferred into a newly created fintech company called MTN New FinCo. This new firm will be co-owned by MTN Group Fintech and a specially created trust. The trust will represent both retail and institutional shareholders of MTN Uganda, ensuring that their existing voting rights and economic benefits are maintained after the separation. MTN says this structure will allow shareholders to continue benefiting from the mobile money business, even though it will now operate independently from the telecom arm.
Retail investors who are not comfortable with the new arrangement have been given an opportunity to opt out. MTN Uganda has created a 14-day exit window, which will open after all regulatory approvals are obtained. During this window, shareholders who wish to exit can sell their shares through licensed brokers. MTN will oversee the process and ensure that any shares not taken up in the market are bought back by the company itself. The goal is to manage the transition smoothly and avoid sharp price drops or panic among shareholders.
In a move to address tax concerns, MTN is also introducing a dividend adjustment trust. This trust will help cover the increase in withholding tax on dividends from 10 percent to 15 percent, which Ugandan tax residents could face under the new structure. By absorbing the difference, MTN aims to protect retail investors from losing money due to tax changes, especially those depending on dividends as a source of income.
The proposed restructuring requires approval from shareholders, and MTN Uganda has scheduled an Extraordinary General Meeting (EGM) for July 22, 2025. The meeting was initially planned for July 2 but was shifted to give shareholders more time to study the new proposal. The EGM will allow both physical and virtual participation to encourage wider involvement from investors across Uganda and beyond.
Despite the assurances from MTN, some shareholders have expressed concerns over the planned changes. A group of investors has filed a “caveat emptor” notice—Latin for “buyer beware”—with Uganda’s Capital Markets Authority. They are demanding more details about the trust, including who will serve as trustees and how their rights as minority shareholders will be protected. They also want clearer information on whether there are hidden liabilities or risks that could affect their investment after the spin-off.
Some investors worry that the new structure may give more control to MTN Group at the expense of local shareholders. Others are afraid that the fintech arm, which is expected to be more profitable in the future, could become less accessible to retail investors if not properly regulated. The filing of the caveat notice shows growing tension between corporate management and minority shareholders over transparency and governance.
MTN Uganda has responded by promising that no shareholder will lose their rights or benefits under the new arrangement. The company said the creation of the trust is designed to protect investor interests and ensure continued participation in MTN MoMo’s growth. It also stated that regular updates will be provided as regulatory approvals progress.
The mobile money business has grown rapidly in Uganda and other African countries, offering services such as money transfers, bill payments, savings, loans, and merchant payments. MTN MoMo is one of the largest platforms in Uganda and contributes significantly to MTN Uganda’s revenue. By spinning it off, MTN hopes to unlock more investment opportunities and attract fintech partners, while also preparing the business for independent growth.
The restructuring mirrors similar moves by other telecom giants in Africa, including Airtel Africa, which previously separated its mobile money arm to raise capital and attract strategic investors. Experts believe that separating mobile money from telecom services allows for clearer financial reporting, better regulation, and more targeted growth in digital financial services.
As Africa’s telecom and fintech sectors continue to merge, MTN’s bold steps in Uganda are being closely watched by investors and regulators across the region. How the company handles shareholder concerns, governance issues, and tax implications may set the tone for future corporate restructurings in the continent’s digital economy.
