MTN Wins More Time to Negotiate $5.2 Billion Fine With Nigeriaby
Africa's biggest phone company remains in talks with regulator
Chairman Nhleko is personally leading discussions, MTN says
MTN Group Ltd. won more time to negotiate a $5.2 billion fine by the Nigerian telecommunications regulator that has shaved almost a quarter of the market value from Africa’s biggest mobile-phone company in the past three weeks.
“Shareholders are advised that the Nigerian authorities have, without prejudice, agreed that the imposed fine will not be payable until the negotiations have been concluded,” the Johannesburg-based company said in a statement on Monday. The regulator had previously set a deadline of Nov. 16 for settlement of the penalty.
The Nigerian Communications Commission imposed the levy on MTN for failing to meet a deadline to disconnect 5.1 million unregistered subscribers earlier this year. The company’s shares have lost about 24 percent of their value since the fine was made public on Oct. 26, and traded 0.2 percent lower at 144.71 rand as of 10:22 a.m. in Johannesburg. That values the company at 267 billion rand ($18.6 billion).
Chairman Phuthuma Nhleko, 55, agreed to take over at MTN a week ago after Chief Executive Officer Sifiso Dabengwa announced his resignation as a result of the fine. Nhleko returns four years after ending a nine-year spell as CEO during which the share price gained about 1,000 percent. He vowed to lead negotiations with the NCC and has met with the regulator, MTN said. Nigeria is the company’s biggest market with more than 62 million subscribers, about a third of the population.
“These discussions include matters of non-compliance and the remedial measures that may have to be adopted to address this,” MTN said.
Late on Sunday, MTN denied a media report that the company had asked for a staggered payment plan for the fine. “We have arrived at no agreement nor requested, as has been alleged in some media reports, such staggered payments with the authorities in Nigeria,” spokesman Chris Maroleng said at the time.