“The National Telecom Operator (NTO) licensee shall require to list at least 20% of its shares on the Uganda Securities Exchange within two years from the date of grant or issuance of the licence," the guidelines state.
MTN Uganda has announced its long-awaited sale of shares to the public through an initial public offer- IPO following approval by the market and industry regulators. This is in fulfilment of the licensing guidelines issued in 2019, under which MTN’s National Operator’s Licence was renewed last year.
“The National Telecom Operator (NTO) licensee shall require to list at least 20% of its shares on the Uganda Securities Exchange within two years from the date of grant or issuance of the licence," the guidelines state.
The guidelines came renowned accountant Samuel Sejaaka asked Finance Minister Matia Kasaija in 2019 why multinationals were not giving Ugandans a chance to share in the profits they were making. Kasaija welcomed the idea.
According to Uganda Securities Exchange Chief Executive, Paul Bwiso, MTN has fulfilled all the requirements for listing on the USE. This will be the first IPO since 2018 when Cipla Quality Chemicals Uganda Ltd went public.
The listing of MTN’s 20 percent will double the current market capitalisation of the USE of about Shillings 4 trillion, according to Keith Kalyegira the Chief Executive, Capital Markets Authority, CMA. No date for commencement of the IPO has yet been announced.
The number of shares, the pricing and how much MTN is expected to raise, will all be published in the prospectus, which is expected to be out on Oct 11, according to Kalyegira.
Uganda will be the fourth market in which MTN Group subsidiaries list, after South Africa, Ghana and Rwanda. Without giving names, Kalyegira also said very soon, another big company will also announce an IPO.
Airtel Uganda was the second telecommunication company to be awarded a license under the current licensing guidelines, followed by Lycamobile. Kalyegira says MTN’s move will take Uganda’s stock market a step further towards global recognition as a frontier market.
MTN Vice President Southern and Eastern Africa, Yolanda Cuba says the IPO has given the company greenlight to expand coverage. "Over the next 3 years, MTN will invest over Shillings 1 trillion to extend coverage and ensure every Ugandan has access to voice and data. Our ambition is to reach 90% of this population," she says.