MTN Nigeria shares soar in Lagos debut

MTN Group’s Nigerian unit’s shares jumped as they began trading in Lagos, a step toward a partial sale of a majority 79% stake owned by Africa’s largest wireless carrier.

MTN Nigeria Communications rose 10% to ₦99 as of 2.19pm, giving it a market value of ₦2-trillion (R79.1-billion). That makes the mobile phone company the second biggest listed firm in Africa’s most populous country, behind only Dangote Cement, the main asset of billionaire Aliko Dangote.

MTN agreed to an IPO of its Nigeria business as part of the settlement of a reduced US$1-billion fine in the country in 2016. In a first step, Nigerian investors who previously bought and sold their shares occasionally over the counter can now trade over the Nigerian Stock Exchange. Later, MTN will add to the free float by selling down its majority stake.

Assigning a valuation to MTN Nigeria has been complex as the parent company is locked in a legal battle with Nigeria’s attorney-general over a $2-billion tax claim, the latest in a series of disputes in its biggest market.

The carrier appointed former Nigerian central bank governor Lamido Sanusi, who’s now the emir of Kano, as a non-executive director to help ease relations.

The shares started trading at 2.14pm, meaning the NSE’s newest member only had 16 minutes to trade before the market closed on Thursday.

With revenue of ₦282-billion in the first quarter, MTN Nigeria is the largest firm on the NSE by sales and the only mobile phone company to be on the bourse.  — Reported by Paul Wallace, with assistance from Renee Bonorchis, (c) 2019 Bloomberg LP