MTN to open Sh132bn Uganda IPO to Kenyan traders

MTN cubicles in Kampala, Uganda. FILE PHOTO | NMG

MTN Uganda will promote a fifth of its stake to Kenyan and different East African traders when it floats its preliminary public supply (IPO) on the Kampala bourse.

The telecom, a South African MTN Group subsidiary, stated Tuesday that it had obtained regulatory approvals to record 20 p.c of its shareholding.

The agency stated Tuesday that it could disclose particulars of the supply in its prospectus to be launched on October 11.

However, Uganda’s Capital Markets Authority (CMA) Keith Kalyegira stated the IPO is anticipated to lift about Sh132 billion ($1.2 billion).

“The intention to drift announcement is a serious step in the direction of delivering on our plan to record on the USE,” MTN Uganda chairman Charles Mbire instructed reporters.

Traders

The extensively anticipated stake sale of the main telecom in Uganda will likely be restricted to residents of the East African Group buying and selling bloc, Ugandan regulators stated earlier.

Apart from Kenya and Uganda, the opposite members of the EAC are Tanzania, Rwanda, Burundi and South Sudan.

The IPO is anticipated to spice up the variety of retail traders on the Uganda Securities Trade from about 40,000 to 200,000 traders.

The itemizing will make MTN Uganda the second publicly traded telecom in EAC after Safaricom’s #ticker:SCOM IPO on the Nairobi Securities Trade in 2008.

“This may doubtlessly be the most important IPO on the Ugandan market and will likely be delivered primarily by a digital paperless/ inexperienced platform which is the primary of its type in East Africa,” stated MTN Uganda in an announcement.

Licence situation

“The supply and itemizing of MTN Uganda is in keeping with MTN Group’s localisation plans to drive native possession within the markets inside which MTN operates,” the agency stated.

The Ugandan authorities set the itemizing of telecoms on the native bourse as certainly one of its licence renewal situations to permit native possession of huge corporations with few giant shareholders.

MTN Group Ltd of South Africa owns greater than 90 p.c of the corporate’s shares, whereas a Ugandan businessman holds lower than 5 p.c shares. 

MTN Uganda, which has 15 million subscribers, had its working licence renewed for 12 years in February final yr after paying $100 million (Sh11 billion) with the native itemizing requirement as a precondition for the allow nod.

“We’re delighted to witness the honouring of this dedication by MTN,” stated Irene Kaggwa-Sewankambo, the Government Director of the Uganda Communications Fee.

MTN Uganda was granted two years beginning July 1 2020, to record 20 p.c of its fairness on the Ugandan Securities Trade.

“This IPO provides Ugandans a possibility to personal a bit of the corporate,” stated USE chief government Paul Bwiso on Tuesday.

MTN Uganda began working within the nation in 1998.

Though comparatively small, Uganda’s telecoms and knowledge market is seen as doubtlessly profitable as a result of most of the nation’s 42 million individuals are younger.

Cell penetration in Uganda grew from 0.27 p.c in 1998 to 67 p.c as of March 2021 underlining the sector’s speedy progress.