MTN speaks after NSE listing mired in confusion, anger

In response to the confusion, anger and accusations that trailed its listing by introduction on the Nigerian Stock Exchange, NSE, MTN Nigeria Communications Plc has responded with an official statement.

The company had come under intense criticisms after several traders, brokers, as well as members of the investing public, could not buy its shares despite a 20% surge in its share price.

In the first three days of its listing, less than 50 trades were recorded despite the flurry of orders targeting the share sale. Prior to the listing, PageOne.ng, did a report width several warnings to the investing public about the implication of getting involved in a listing by introduction.

However, the level of public outcry and agony faced by traders, brokers and the investing public showed many people were not fully abreast of the circumstances surrounding the listing.

The company said in a statement that:

MTN Nigeria Communications Plc (MINN) is aware of media reports that make a series of allegations about the listing of MTNN on the Nigerian Stock Exchange (NSE). These reports are incorrect and misleading.

MTNN’s listing by way of introduction on the premium board of the NSE on 16 May 2019, creates new telecoms and technology asset segment for the NSE. It also deepens the equity capital markets base of the country, which makes it possible to broaden the shareholding base of MTNN over time. The listing by introduction means that the existing shares of MTN Group (78.8%), the Nigerian investors (19.4%) and other investors (1.8%) are listed. All MTNN shareholders will be free to trade their shores on the NSE.

MTNN met all of the conditions required to list as a member of the Premium Board of the NSE and was required to publish a commencement listing price. The outstanding matter relating to the Attorney General of the Federation created a high degree of uncertainty over the valuation of MTNN, which makes it difficult to determine a fair price for MTNN at present.

The associated risks and potential returns could not be fairly assessed and priced. As a result, and in the best interest of all shareholders, both the current and future, the commencement listing price was set at N90 per ordinary share, which was determined with reference to the private shares sale transactions by MTNN shareholders over a 180 trading day period.

In response to the criticism that the company raised a loan facility of about $555 million instead of raising such capital through an initial public offering, MTN defended itself claiming that it is in line with its ‘medium term business plan’:

The N329 billion medium-term facility signed in 2013 will be fully paid by November 2019. Therefore, the N200 billion facility signed on May 17, 2019 forms part of the Company’s new debt program, in line with the medium term business plan of the Company.

The new facility, when drawn down, will be used to support our medium-term capital expenditure projects; fund our working capital needs, meet operational expenditure requirements and position the Company to take advantage of future expansion opportunities.

The preference shores have not been redeemed. The redemption of the preference shares was always envisaged as a necessary part of simplifying the capital structure of the Company ahead of or soonest after listing. After obtaining necessary regulatory approvals, the preference shares redemption will be taken from the distributable reserves of the Company and paid for with cash generated from its operations.

However, the NSE had come out to defend its position on the matter. In a statement released on its official Twitter page, the NSE said:

“Our attention has been drawn to a few critical issues raised in various print and social media platforms regarding the listing of MTN Nigeria Communications Plc (MTN Nigeria) on the Premium Board of the Exchange.

As an Exchange that is committed to operating a fair, orderly and transparent market, we deem it important to clarify these issues. 

MTNNG listed by Introduction. Where a company lists following an Initial Public Offering, shares are expected to be available for trading on the day of listing. In a Listing by Introduction, however, no shares have been offered for subscription by the company prior to listing.

Thus, without any intervention, it is possible that there will be no shares available for trading on the listing date. Indeed, currently, no rule of The Exchange compels shareholders in a listed company to tender their shares for trading.

Shareholders are at liberty to trade their shares at any time and price suitable to them. Thus, in order to stimulate trading in the shares of companies that List by Introduction, the NSE’s practice is to urge the company to make shares available on the day of listing.

In the case of MTN Nigeria, the NSE had requested the Company as part of the listing process to make shares available and The Exchange expects the company to do that.”

Many analysts are of the opinion that the NSE is non-committal in reigning MTN Nigeria and some of its advisors to prevent a sordid situation where the confidence of the investing public in the capital market is threatened.


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