Capital Markets

Jimnah Mbaru firm to earn hefty fees in Uganda telco IPO


Dyer and Blair chairman Jimnah Mbaru. FILE PHOTO | NMG

MTN Uganda has picked Kenyan investment bank Dyer and Blair to assist with its Initial Public Offering (IPO) guaranteeing the local firm, owned by billionaire businessman Jimnah Mbaru hefty fees.

The Sh27.6 billion IPO opened on Monday.

Investors in Kenya can apply for shares through SBG Securities, a subsidiary of South Africa's Stanbic Holdings Plc and Kenyan investment bank Dyer and Blair which is the lead retail broker.

"MTN Group (has) appointed SBG Securities Uganda Limited as transaction adviser and lead sponsoring broker, S&L Advocates as legal advisers, KPMG Certified Public Accountants as reporting accountant, Crested Stocks and Securities Limited, and Dyer and Blair Uganda Limited as lead retail brokers and Equity Stockbrokers Uganda Limited and UAP-Old Mutual Financial Services Uganda Limited as selling agents," said MTN Group in the IPO prospectus.

Brokers earn commissions based on shares they sell.

The Business Daily could not immediately establish the exact commission Dyer and Blair would attract compared to the possible number of shares sold.

MTN, however, said the legal adviser S&L will take home Sh33 million (UGX1 billion) while the transaction adviser SBG securities will pocket Sh230 million (UGX7.4 billion).

Reporting accountants KPMG will earn Sh10 million (UGX328 million) while MTN will pay Sh30.9 million (UGX1 billion) to the Ugandan Capital Markets regulator for approval. Placement fees at the Kampala bourse are set at Sh303 million (UGX9.8 billion).

South Africa’s MTN Group is selling 4.47 billion shares in its Ugandan subsidiary at a price equivalent to Sh6.2 apiece.

The IPO is open to Ugandan investors as well as citizens of other East African Community member states, including Kenya.

MTN Uganda will sell a fifth of its stake to investors.

The telecom, a South African MTN Group subsidiary, has received regulatory approvals to list 20 percent of its shareholding.