MTN will sell down another 7% stake in its Uganda business as part of its ongoing effort to increase local ownership in the East African business.
MTN International, a wholly owned subsidiary of the JSE-listed group, will sell a portion of its shareholding in MTN Uganda from May 27 to June 10. About 1.5-billion ordinary shares, representing a 7.03% stake in MTN Uganda, will be on offer, including incentive shares.
“The offer, although open to investors more broadly, will provide an opportunity for Ugandan retail and professional investors to own a stake in MTN Uganda and participate in its future growth,” the group said in a note to investors.
MTN Uganda CEO Sylvia Mulinge hinted at this offer in March when the company reported full-year earnings to end-December.
Africa’s largest mobile operator has been localising ownership in a number of its operating countries to comply with licensing requirements, while highlighting value in certain individual business units outside of its main listing on the JSE.
In recent years, the group has listed its businesses in Nigeria, Ghana, Rwanda and Uganda. This is typically done by selling down its stakes in phases, which become free float on the various exchanges.
These exercises tend to see MTN ending up with a 70% stake in each entity, with the balance being held by other investors.
MTN Uganda started trading on the country’s stock exchange in December 2021 after an initial public offering that raised R2.4bn, the largest such amount in the East African country at the time. The company is the biggest by value on the Uganda Securities Exchange.
The listing reduced MTN group’s stake in the Uganda unit from 96% to about 83%. This latest transaction takes MTN’s equity down to 76%.
Uganda’s largest mobile operator reported total revenue growth of 19.5% to 750.5-billion Ugandan shillings for the quarter to end-March, while profit after tax increased 24.4% to 150-billion Ugandan shillings.
Service revenue grew 19.4%, underpinned by strong double-digit growth in voice (up 15.5%), data (22.4%) and fintech (23.5%) revenues.
Mulinge said there was a slight increase in macro headwinds, particularly inflation, in the first three months of the year.
“These headwinds are expected to remain in the near term, with Bank of Uganda projecting inflation to trend up further to a range of 5.5%-6% over the year, which may impact our customers,” she said.
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