MTN Group has given the Ugandan unit the regulatory approval to offer 20 per cent of its stake in an initial public offering (IPO) to local investors.
The move is part of the Group’s strategy to allow more local investors to trade shares in individual units.
Although the giant telecom firm is yet to disclose details of the offering, the IPO seeks to raise 1.2 billion dollars (approximately 132 billion Kenyan shillings) from local investors from the East African Community (EAC) bloc.
The expected figure almost doubles what Uganda’s capital market has raised since its inception, which, the Uganda Securities Exchange says it stands at 623 million dollars since 1998.
“The intention to float announcement is a major step towards delivering on our plan to list on the USE,” Charles Mbire, MTN Uganda chairman told the press.
The eligible investors must be citizens of Kenya, Uganda, Tanzania, Rwanda, Burundi, and South Sudan.
To meet the target, the IPO will increase the number of retail investors from approximately 40,000 to 200,000 investors.
The listing is the second publicly traded telecom in the EAC bloc after Safaricom’s IPO on the NSE in 2008.
“This will potentially be the largest IPO on the Ugandan market and will be delivered primarily through a digital paperless/ green platform which is the first of its kind in East Africa,” said MTN Uganda in a statement.
Yolanda Zoleka Cuba, the MTN Group Vice President Southern and East Africa Region stated that the company intends to invest 1 trillion shillings (281.37 million dollars) over the next three years to expand coverage and access across the East African country.
The IPO offering follows other MTN listings in Nigeria, Ghana, and Rwanda. The Group is in the middle of a scaling back of the company, with the focus turning primarily to African telecom and mobile-banking services.
The Johannesburg-based carrier abandoned its business in Syria and is looking to sell the Afghanistan and Yemen units. An upcoming initial public offering of IHS Holding Ltd. will allow MTN to reduce its stake in the pan-African towers company.
