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Capital Market: Operators, shareholders urge MTN to extend public offer

December 13, 2021

By Chinenye Anuforo and Chinwendu Obienyi 

Following the ground-breaking public offer of the 575 million units of ordinary shares of Nigeria’s telecom giant, MTN Nigeria, capital market stakeholders have called on the telecom company to extend the period of the offer, adding that this would capture more Nigerians in the investing net.

The stakeholders, who spoke to Daily Sun via separate telephone interviews, said the decision of the company to reposition itself as a Nigerian company is very commendable and urged other multinational and indigenous companies to follow the Group’s example.

The telecom company had disclosed its plan to expand Nigerians’ participation in the shareholding of the company through a public offer and its application list for offering of about 575 million ordinary shares to the general retail investing public at a price of N169 per share drove excitement in the investing community.

Investigations done by Daily Sun revealed that investors are allowed a minimum subscription of 20 shares and an incentive of one free share for every 20 shares purchased, subject to a maximum of 250 shares per investor. The incentive is open to retail investors who buy and hold the shares allotted to them for at least 12 months after the allotted date.

Notably, this is the first digital application process running on a extensive network of licensed agents to ensure that it has as much footprints as possible and as much participation as possible. This offer is the first paperless subscription in Nigeria through a primary offer administered by a Nigerian Exchange Limited (NGX), and this enables retail investors to subscribe for the shares electronically.

Further investigations reveal that applications for the offer can also be received through issuing houses and authorized stockbrokers and banks.

According to the company, its intention is to build a local shareholder base of more than two million Nigerians while maintaining the focus of building the largest retail shareholders in the country and not a form of exit of MTN Group from Nigeria.

Commenting on the public offer, its Chief Executive Officer, Karl Toriola, stated that the offer is not meant to raise capital but to be a sale down of the holdings of MTN Group in a structured process of 78 per cent to 65 per cent.

“We believe we have a compelling growth story and it is very difficult to find a company in the stock exchange that can offer you both strong dividends and strong growth. We are also a company that is very well managed and efficient, very well governed and disciplined. We have a Board of Directors that oversee what we do and a Group that also ensures we are providing the profit margins that is expected of us. All these make us well positioned for the long term”, Toriola said.

However, as far as the excitement in the market is on a high note, the duration of the offer according to stakeholders is a little bit short (closing at 5:00pm on December 14, 2021), adding that it is wise for the company to extend the offer as more Nigerians are yet to participate in the offer due to little challenges.

The Managing Director, Highcap Securities, David Adonri, while commending the telecom company for the iconic offering, said there should be an extension to allow investors who wish to partake of the offer.

Adonri noted that, although several shareholders and prospective investors have made a strong case for extension of the closing date for the offer, they can quickly partake since the application is going on simultaneously on the digital and physical space.

“Even within one’s confines and within 10 minutes, one who is conversant with computer and a mobile phone can run the transaction. The growth of the company in recent times has risen a lot despite all the fines by the Federal Government and so it is good that they are trying to reposition themselves as a Nigerian company”, he said.

The National Coordinator, Progressive Shareholders Association, Okezie Boniface, also commended MTN Group for its decision to sell up to 575 million shares to institutional and retail investors.

He said: “I would like to commend the MTN Group for reducing their shareholding to enable more Nigerians own shares in MTN Nigeria. Their decision clearly shows that today, MTN is no longer a foreign company, it is now Nigerian. This is commendable.

On his part, the Chairman, Ibadan Zone Shareholders Association, Eric Akinduro, said the group has done marvelously well in publicising this offer and added that the excitement in the air shows that people are still looking for value.

“The value investors have placed on MTNN is very high because it is an international company and people have so much belief in them that they will deliver returns on investments. Yes, the pricing is high but we are not looking at that, rather we are looking at the satisfaction we will derive from it. From the look of things, it seems it will be oversubscribed but some of the people showing interest do not have a CSCS account and it is pertinent to have this account before one subscribe for it . And because of the limited time to go through these processes of opening an account is more of a hurdle to the prospective investors who want to partake before the offer closes”, Akinduro said.

According to him, “the duration of the offer is very short and with a lot of investors still agitating for it, we are urging the company of looking at ways of extending the duration as it will help Nigerian shareholders. There are complaints of issuing house not being here in Nigeria but at the end of the day, what we want to see as shareholders is the value that is placed on multinational companies and this is a big lesson to our indigenous companies. When they understand and know what they are doing, people will rally round you and support you in everything you are doing and so it is a good thing and I believe MTN will deliver”.

However, in view of the above, the MTN Public offer is a digital offer and one can apply for shares digitally through the PrimaryOffer app by NGX. One can visit the Primary Offer website by the NGX; or download the PrimaryOffer app by NGX from the App Store for IOS and Google Play store for Android devices. Furthermore a BVN, CHN and CSCS Number are required to register and submit an application on PrimaryOffer. If you do not have CSCS number, the app can help you create one.

The post Capital Market: Operators, shareholders urge MTN to extend public offer appeared first on The Sun Nigeria.

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