MTN Shares Halted Pending Announcement on Nigerian Fine

Trading in MTN Group Ltd. shares was halted by the Johannesburg Stock Exchange on Monday pending an announcement over a $5.2 billion Nigerian fine. The company's bonds dropped for a third day, driving yields to a record.

The stock fell as much as 9.7 percent before paring losses and was the biggest decliner on the benchmark FTSE/JSE Africa All Share Index. Trading was halted with the stock 5.3 percent down at 149.48 rand by 10:33 a.m. in Johannesburg. The securities have slid 22 percent since MTN said it’s facing the fine on Oct. 26.

MTN failed to convince the Nigerian Communications Commission to lower its penalty for failing to comply with an order to disconnect customers with unregistered phone cards, CAJ News in Nigeria reported, citing a company official familiar with the talks. MTN hasn’t agreed to the fine and continues to meet with Nigerian authorities to challenge it, a person familiar with the matter told Bloomberg, asking not to be identified because the matter is private.

Investors “were expecting something to come out at the weekend and it hasn’t, and now the pressure is on because they’ve been told that they have to pay this fine by next week,” Rob Pietropaolo, a trader at Vunani Private Clients (Pty) Ltd., said by phone from Johannesburg. “Because of their lack of communication, investors are punishing the share and obviously running for safety.”

Yields Surge

The JSE halted all trading in the stock, which will resume once MTN has released a statement, the JSE said in an e-mailed statement. MTN will make a statement later on Monday, Nik Kershaw, head of investor relations, said by phone.

Yields on the Johannesburg-based MTN’s $750 million of bonds due November 2024 rose 10 basis points to 5.99 percent as of 10:49 a.m. in London, an all-time high. Rates on the notes have climbed 128 basis points over the past six days.

MTN spokesman Chris Maroleng declined to comment on talks with regulators. MTN has been in negotiations with the government, Tony Ojobo, a spokesman for the Nigerian Communications Commission, said by phone from Abuja, the capital. MTN executives haven’t met with Vice President Yemi Osinbajo and the NCC is in charge of talks with the company, his spokesman, Laolu Akande, said by phone from Abuja. The issue is “not a presidential matter,” Femi Adesina, a spokesman for Nigerian President Muhammadu Buhari, said by phone.

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