Uganda Says MTN Unit to Sell Stake to State-Run Pension Fund

(Bloomberg) -- MTN Uganda Ltd. is in talks to sell an unspecified stake to the state-run National Social Security Fund that would widen local shareholding currently at only 5 percent, President Yoweri Museveni’s office said.

The company is in the process of negotiating “disposing shares to NSSF,” according to an emailed statement following a meeting between the Ugandan leader and MTN Group Ltd. Chief Executive Officer Robert Shuter on the sidelines of the World Economic Forum in Davos.

“It is important that you float shares on the local stock exchange to allow for local ownership now that the license has been renewed,” the statement quoted Museveni as saying, without giving details.

Planned share offers by MTN Uganda follow similar moves by group in Ghana and Nigeria -- both agreed to by the Johannesburg-based company as part of a deal with regulators.

A 20-year license for the company with a 55 percent market share expired in October, according to the Uganda Communication Commission.

The government planned to charge the company $58 million to renew the permit for 10 years, the Daily Monitor newspaper reported last week. The amount was reduced from an initial $100 million after MTN said it’d roll out high-speed internet connections across the country as required under a new national broadband policy.

Museveni told Shuter that MTN should offer more value-added products, rather than just “extending talking services.”

“Pay attention to this issue,” Museveni said. “Information technology penetration in Africa can end up being a problem.”

To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net

To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Helen Nyambura, Jacqueline Mackenzie

©2019 Bloomberg L.P.