Africa's Biggest Fund Manager Raises Stake in Embattled MTN

(Bloomberg) -- The Public Investment Corp. raised its stake in MTN Group Ltd. for the second time in as many days, taking advantage of a price that’s close to 10-year lows amid a crisis in Nigeria.

The PIC’s shareholding is almost 26 percent, Johannesburg-based MTN said in a statement on Thursday. The previous day, Africa’s largest wireless carrier by sales said the stake had increased to about 24 percent.

“We believe MTN has a strong set of assets and competencies,” Deon Botha, head of corporate affairs, said in emailed comments, declining to say more about the PIC’s rational for boosting its stake.

MTN’s share price has plunged by 19 percent since Nigerian authorities in late August alleged that the company had illegally transferred $8.1 billion out of the country. The carrier is also on the hook for $2 billion in back taxes in Nigeria, it’s biggest market. However, there are signs that at least the first matter may be resolved, with Central Bank Governor Godwin Emefiele saying last week the two sides are on “the verge” of announcing a deal.

The shares rose 1.5 percent to 89.73 rand as of 4:30 p.m. in Johannesburg on Thursday, valuing the company at 169 billion rand ($12 billion).

“There’s been positive rhetoric on a resolution in Nigeria and so that helps,” said Ruhan du Plessis, an analyst at Avior Capital Markets in Cape Town. “It seems the PIC is comfortable buying into MTN at these levels.”

The PIC is Africa’s largest money manager with more than 2 trillion rand under management. The Pretoria-based company is state owned and looks after South African government worker pension funds.

To contact the reporters on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net;Loni Prinsloo in Johannesburg at lprinsloo3@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, John Bowker, Kim Robert McLaughlin

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