Trouble! MTN  Sells Off Offices  To Make Ends Meet

Trouble! MTN Sells Off Offices To Make Ends Meet

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By Our Reporter

All is not well with telecom giant MTN, after Spy Uganda learnt that the company is selling off some of their most prized assets so as to make ends meet in this biting economy!


We have established that MTN Group Ltd is in advanced talks to sell stakes in tower assets in Ghana and Uganda worth as much as 8 billion rand (USD534m) as Africa’s largest wireless carrier looks to accelerate a broader disposal plan.

The South African company is looking to exit joint ventures with American Tower Corp., which expanded on the continent with the acquisition of Eaton Towers Ltd in May.

The move will help MTN meet its target of generating 15 billion rand in asset sales over three years.

It should be noted that MTN shares gained 0.7% to 94.22 rand in early trade in Johannesburg, extending the year’s increase to 5.7%.

But the company strategy for this year hasn’t gone entirely as planned since it was announced in March. A disposal of a majority stake in Botswana’s Mascom for USD300m has been scrapped, while shares in e-commerce group Jumia Technologies AG have plunged since an April initial public offering, making it less viable for MTN to sell a stake in the near term.

We have also learnt that MTN’s Jumia interest is now worth less than USD100m and the Chief Executive Officer Rob Shuter said by phone that “It’s regrettable that the value has gone down so much.”

Further proceeds could be generated by the redemption of the Nigeria unit’s preference shares, which MTN values at USD315M, according to Chief Financial Officer Ralph Mupita.The group is awaiting a ruling from the central bank on that matter.

A proposed sale of IHS Towers Ltd, which is separate from the 15 billion-rand plan, may be revived as shareholders including MTN prepare for a fresh tilt at an IPO next year.

MTN has been exploring asset sales while focusing on key markets such as Nigeria.
According to company statistics, revenue in the company’s biggest market advanced 12% in the third quarter, while the earnings margin was 54%. That’s even, if a USD2Bn tax dispute looks set to drag on into next year.

All that not withstanding, in South Africa, MTN and its rivals are battling with regulator curbs on data prices, weak consumer confidence and a delay over the release of new spectrum.

Sales in that market rose by 0.4% in the three months through September, while subscriber numbers fell. Overall customer numbers increased by 3.5 million in the third quarter to 243.7 million across MTN’s 21 countries across Africa and the Middle East, although things are not all that rosy for the much acclaimed telecom giant. Watch the space……

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