South Africa’s MTN Group weekend lifted caution on trading of its shares after the Nigerian government reduced fine imposed on its Nigerian mobile phone unit, MTN Nigeria, from N1.04 trillion to N330 billion.
South Africa’s MTN Group, owners of MTN Nigeria, says it is relieved by the decision of the Nigerian Communications Commission (NCC) to allow the mobile phone company pay the reduced fine over the next three years.
Following the deal with the Nigerian telecoms regulator, which had last October imposed the unprecedented N1.04 trillion on MTN Nigeria for 5.1 million unregistered subscriber lines, its parent company has given comfort to shareholders on trading of its shares in South Africa.
MTN Group announced to the South African market at the weekend that following the resolution of the fine issue with the Nigerian government, it is withdrawing the cautionary advice of trading of its shares and “shareholders are advised that they are no longer required to exercise caution when dealing in the company’s securities.”
MTN Group says the fine issue was resolved with the Federal Government of Nigeria on the following terms:
MTN Group informed South African shareholders that it resolved the matter with the Nigerian government and MTN Nigeria has agreed to pay a total cash amount of N330 billion over three years.
According to the mobile phone company, the deal is that the payment is based on the equivalent of $1.671 billion at the official exchange rate and $902 million at the Lagos Parallel Market Rate to the Federal Government of Nigeria in full and final settlement of the matter payable as set out under the underlisted conditions:
The Naira 50 billion paid in good faith and without prejudice by MTN Nigeria on February 24, 2016 forms part of the monetary component of the settlement leaving a balance of N280 billion outstanding which will be discharged as follows:
- N30 billion on July 8, 2016;
- N30 billion on March 31, 2017;
- N55 billion on March 31, 2018;
- N55 billion on December 31, 2018;
- N55 billion on March 31, 2019;
- N55 billion on May 31, 2019
MTN Group says that in addition to the monetary settlement set out above:-
– MTN Nigeria subscribes to the voluntary observance of the Code of Corporate Governance for the Telecommunications Industry and will ensure compulsory compliance when the said Code is made mandatory for the Telecommunications Industry.
– MTN Nigeria undertakes to take immediate steps to ensure the listing of its shares on the Nigerian Stock Exchange as soon as commercially and legally possible after the date of execution of the settlement agreement;
– MTN Nigeria shall always ensure full compliance with its license terms and conditions as issued by Nigerian Communication Commission (‘NCC’).