MTN commences IPO process, selects financial advisers, brokers

MTN group has commenced the process of its IPO with the appointment of some banks and brokers to help with the listing, including Renaissance Capital, FirstRand Ltd.’s Rand Merchant Bank, Nigerian firm Chapel Hill Denham, Vetiva Capital to work with global co-ordinators Citigroup Inc. and Standard Bank Group Ltd.

According to Bloomberg, the financial institutions selected to handle the IPO which is scheduled for June or July this year include:

MTN, the report says,  intends to raise $400 million from the Initial Public Offer (IPO) of its Nigerian unit between June and July this year.

An IPO is the first time a company sells its shares to the public on a stock exchange. MTN agreed to the listing in June 2016 as part of a $1 billion fine for missing a deadline to disconnect unregistered subscribers in the country.

The penalty, originally set at $5.2 billion, led to the resignation of MTN’s then chief executive officer, a first-ever full-year loss and a slump in the share price that’s yet to be clawed back.

As part of the IPO it would split one share into 50 units, to create 20 billion shares, which would be listed on the exchange and set the IPO price via book building.

Book building is a valuation approach where the price of a stock or security is determined by investors who table the price they want to buy the asset for, and the quantity they want to purchase.

The sum of all the orders and the value is then used to determine the average price.

MTN Group recently met with Yemi Osinbajo, the Vice-president, and assured the government of its commitment on the planned IPO and diversification of shareholding to Nigerians.