MTN settles $8.1 billion Nigeria case
MTN Group Limited shares jumped as much as 8,2 percent after the phone carrier settled allegations it illegally transferred $8,1 billion of funds out of Nigeria, ending a crisis that had threatened its operations in Africa’s most populous country.
The Central Bank of Nigeria’s decision to clear MTN of wrongdoing in its repatriation of dividends over an eight-year period means it will cost the Johannesburg-based company just $52,6 million to satisfy Nigerian officials over their concerns with a 2008 private placement.
The terms of the deal were a positive surprise to investors, even with the company and officials having signalled that a resolution was likely. Nigerian authorities originally wanted a full reversal of the $8,1 billion of dividends.
MTN has had persistent run-ins with authorities as it chases big sales growth opportunities in Nigeria.
There are still major hurdles for it to overcome in its largest market: Nigeria has ongoing claims to $2 billion of back taxes. MTN also faces geopolitical risks tied to its businesses in Syria and Iran.
The latest discord has obstructed a plan to list the local unit on the Nigerian Stock Exchange, a measure to which MTN agreed after it missed a deadline to disconnect unregistered subscribers. That issue led to a $1 billion penalty for MTN and its first-ever loss in 2016.
MTN shares were up 7,7 percent at 9:47 am in Johannesburg yesterday. The company had seen more than $3 billion of its market value erased since the news of the fund-transfer allegations came to light in August, with the stock losing more than a third of its value. — Bloomberg.
