Telecoms firm MTN Uganda to list 20% stake, boost investment

Credit: REUTERS/THOMAS MUKOYA By Elias Biryabarema

KAMPALA, Oct 5 (Reuters) – Telecommunications firm MTN Uganda said on Tuesday it would list a fifth of its equity capital on the country’s bourse, while a senior executive at parent MTN said it planned to invest 1 trillion shillings ($281.37 million) to improve coverage in the East African country.

MTN Uganda’s Initial Public Offering (IPO) will potentially be the country’s biggest ever and a major boost to Uganda’s Stock Exchange (USE), a small bourse with 40,000 investors trading just 17 stocks.

Keith Kalyegira, Chief Executive Officer of the Capital Markets Authority said the IPO is expected to raise about $1.2 billion.

"I know the capital going to be raised by the company is almost double what has been raised in the entire capital market since the inception of Uganda’s capital market in 1998," he told a ceremony announcing the share offer.

MTN Uganda said it had secured regulatory approval for the listing but could not give further details. Kalyegira said the prospectus would be made available to the public on Oct.11.

A unit of South Africa’s MTN Group MTNJ.J, MTN Uganda has a subscriber base of 15 million and also offers mobile money financial services.

MTN Group Vice President Southern and East Africa Region Yolanda Zoleka Cuba said the new investment over the next three years would help Uganda achieve its goal of reaching 90% national voice and data coverage by 2025.

MTN Uganda chiefly competes with a unit of India’s Bharti Airtel BRTI.NS. Its subscriber base could potentially get a boost after smaller rival Africell announced it was exiting the market.

MTN Uganda, which posted a 9.3% increase in 2020 revenues to 1.9 trillion shillings, launched in 1998 with a 20-year operating licence.

It secured a 12-year renewal of its licence in June last year after paying $100 million. One of the conditions of the extension was to list at least 20% of its equity on the stock exchange within two years.Among the stocks trading on the USE are Uganda’s biggest lender, Stanbic, and its main power firm, Umeme. It expects its new mobile trading platform to attract more investors.($1 = 3,554.0000 Ugandan shillings)(Reporting by Elias Biryabarema; writing by George Obulutsa; editing by Jason Neely, Kirsten Donovan) (( ; Tel: +254 20 499 1234; Reuters Messaging: ))The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. […]

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