South Africa’s MTN Group has made a net gain of R564 million ($29.76 million) from selling 1.57 billion shares in its Ugandan subsidiary, despite offering them at a discount to meet Uganda’s 20% local ownership rule for foreign telecoms.
According to MTN’s 2024 audited financials, the sale generated R1.03 billion ($54.67 million) after taxes and costs. This latest transaction, completed in June 2024, reduced MTN’s stake in MTN Uganda from 83.05% to 76.02%.
The discounted offer, priced at Ush170 ($0.04) per share versus the original IPO price of Ush200 ($0.05), included an incentive of 30 free shares for every 140 purchased. The deal was oversubscribed 2.3 times, attracting three billion share requests.
This follows MTN’s initial public offering in Uganda in November 2021, which sold a 12.97% stake. Together, both offers helped MTN meet Uganda’s regulatory requirement to localize at least 20% of telecom ownership.
The move reflects broader pressures in Uganda, where the government seeks to curb profit repatriation by foreign-owned telecoms. Airtel Africa, facing the same rule, also plans to offload an additional 9.11% stake in Airtel Uganda after only partially meeting the requirement in its 2023 IPO.
MTN has also pursued localization elsewhere, including the sale of 686 million shares in MTN Ghana, reducing its stake to 73.99%. Meanwhile, the company continues to navigate operational challenges, such as a R11.72 billion ($618.66 million) impairment in Sudan due to conflict and inflation.
Additionally, MTN reported gains from subsidiary sales in Afghanistan and Guinea-Bissau (R1.3 billion) and a loss of R1.9 billion from exiting Guinea-Conakry in 2024.
Source: Extensia
