MTN sells Botswana unit as part of R15bn fund-raising drive

MTN Group announced the disposal of its share in a Botswana joint venture as Africa’s biggest wireless carrier by revenue kicks off a drive to raise about R15 billion ($1.1 billion) from asset sales and strengthen the balance sheet.

The company agreed to sell its 53% stake in Botswana’s Mascom to Econet Wireless Zimbabwe for $300 million, the Johannesburg-based company said in a statement on Thursday. Other businesses now on the market include e-commerce services, while its interest in IHS Towers, which MTN is looking to exit, is also available to potential buyers or an initial public offering, the company said.

The news comes a year after chief executive officer Rob Shuter announced a review of MTN’s then-22 markets across the Middle East and Africa to evaluate ways of simplifying the business. The sale of MTN’s Botswana interest follows a disposal of its Cyprus unit.

“We are simplifying the group, we are reducing risk, and improving returns,” Shuter said in a phone interview. “That will generate some returns that will be helpful for our gearing and other priorities.”

MTN reported the strategy alongside adjusted earnings per share, excluding some items, of R3.37 in 2018. That compared with a company guidance of R3.28 to R3.46. The company also raised its medium-term service-revenue guidance to double-digit percentage figures from upper-single-digits.

The mobile-phone company is still facing a number of challenges across its territories, with a Nigeria court hearing into an alleged unpaid tax bill of about $2 billion due later this month. That’s just the latest in a series of controversies in MTN’s biggest market. Late last year, the carrier agreed to pay $53 million to settle a separate allegation about the illegal repatriation of funds, while a $1 billion fine in 2016 led to a full-year loss.

The $53 million outlay was among one-time costs outlined by MTN in a recent trading statement as hurting 2018 earnings. Those also include the effect of a stronger rand when compared to the various other currencies it uses in different markets.

MTN’s shares have slumped 39% in the last 12 months, and have declined for eight consecutive days. The stock is trading at six month lows, valuing the company at R143 billion. Source: Money Web