Companies

Authority gives nod to MTN Uganda shares public offer

mtn-pic

MTN Customer care staff attend to data and bundles clients during an MTN EXPO in 2018. PHOTO | MORGAN MBABAZI | NMG

Kenyan investors are now able to purchase shares of MTN Uganda after the Capital Markets Authority (CMA) allowed the telco to market its initial public offering to local investors.

The initial public offering (IPO) offer opened in Uganda on October 11 but Kenyan investors only got a chance to participate starting yesterday after the regulator gave a “no objection” to the transaction.

The offer runs until November 22.

“The marketing in Kenya is spearheaded by SBG Securities and Dyer and Blair, both of whom are licensed market intermediaries in Kenya, working in collaboration with their respective affiliates in Uganda,” MTN said in a statement.

A total of 4.4 billion shares representing a 20 percent stake are on offer at a price equivalent to Sh6.3 apiece. The IPO comes after the Ugandan government directed telcos to increase the ownership of local investors.

MTN Uganda is currently owned by MTN Group (96.01 percent) and businessman Charles Mbire (3.98 percent).

Kenyan investors will require a valid national identity card or passport to open a Securities Central Depository (SCD) account at the Uganda Securities Exchange to buy shares in the IPO.

The company says investors participating in its IPO stand to benefit from dividends and potential capital gains.

“MTN’s current dividend policy was approved by the board on November 2, 2020. The policy provides that in the medium-term, MTN will target a dividend payout ratio of at least 60 percent of annual profits after tax,” the company says in the prospectus.

The telco made a net profit of $36.6 million (Sh4 billion) in the half-year ended June when it had net assets of $208 million (Sh23.1 billion), giving it an annualised return on shareholder funds of 35.1 percent.

Ugandan investors are being given the top priority in shares allocation. East African investors –from Uganda, Kenya, Tanzania, Rwanda and Burundi— have a chance to get a total of 213.2 million free shares worth $11.9 million in the IPO.

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