MTN Shares Jump as Company Settles $8.1 Billion Nigeria Case

(Bloomberg) -- MTN Group Ltd. shares jumped as much as 8.2 percent after the phone carrier settled allegations it illegally transferred $8.1 billion of funds out of Nigeria, ending a crisis that had threatened its operations in Africa’s most populous country.

Key Insights

• The Central Bank of Nigeria’s decision to clear MTN of wrongdoing in its repatriation of dividends over an eight-year period means it will cost the Johannesburg-based company just $52.6 million to satisfy Nigerian officials over their concerns with a 2008 private placement.
• The terms of the deal were a positive surprise to investors, even with the company and officials having signaled that a resolution was likely. Nigerian authorities originally wanted a full reversal of the $8.1 billion of dividends.
• MTN has had persistent run-ins with authorities as it chases big sales growth opportunities in Nigeria. There are still major hurdles for it to overcome in its largest market: Nigeria has ongoing claims to $2 billion of back taxes. MTN also faces geopolitical risks tied to its businesses in Syria and Iran.
• The latest discord has obstructed a plan to list the local unit on the Nigerian Stock Exchange, a measure to which MTN agreed after it missed a deadline to disconnect unregistered subscribers. That issue led to a $1 billion penalty for MTN and its first-ever loss in 2016.

Market Reaction

• MTN shares were up 7.7 percent at 9:47 a.m. in Johannesburg. The company had seen more than $3 billion of its market value erased since the news of the fund-transfer allegations came to light in August, with the stock losing more than a third of its value.

Get More

• Monday, MTN’s $8.1 Billion Nigeria Spat Costs $53 Million to Solve

To contact the reporters on this story: Solape Renner in Lagos at srenner4@bloomberg.net;Thomas Pfeiffer in London at tpfeiffer3@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, John J. Edwards III, Eric Pfanner

©2018 Bloomberg L.P.