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MTN registers Nigerian business shares before listing

This comes after a judge cleared MTN of missing a deadline to file a challenge against a $2bn tax demand.
MTN says the attorney general's claim is without merit and that he had exceeded his powers in making the demand. Picture: Waldo Swiegers, Bloomberg

MTN has registered more than 20 billion shares of its $5 billion Nigerian business before its planned listing of the unit in the West African nation, the South African telecoms firm said on Tuesday.

It announced the move shortly after a judge cleared Africa‘s biggest telecoms firm on Tuesday of missing a deadline to file a challenge against a $2 billion tax demand, the latest row with the authorities to beset MTN’s Nigerian business.

MTN argues that the attorney general exceeded his power when he issued the backdated tax demand in September. State lawyers had filed a case saying MTN did not file its challenge in time.

MTN Nigeria said after the judge’s ruling it had registered to list 20.4 billion ordinary shares at 0.02 naira ($0.0001) each with Nigeria’s securities regulator, before listing the business that MTN valued at about $5 billion last year.

“We have achieved another milestone in our listing process,” MTN Nigeria Chief Executive Ferdi Moolman said in a statement.

The company said it had started talks with the stock exchange to complete the listing and would meet investors to discuss the plans on May 16.

It has previously said it did not plan to raise funds from investors immediately via the listing.

Nigeria is MTN’s biggest market, with 58 million users in 2018 and accounting for a third of the firm’s annual core profit. But the business has faced challenges in Nigeria, ranging from the tax demand to a fine over unregistered SIM cards.

MTN had said in 2016 it planned to list its local unit on the Nigerian Stock Exchange after agreeing to pay a $1.7 billion fine to settle the SIM card dispute with the government.

It previously said it planned to list in the first half of 2019.

In the tax case, a hearing into whether the auditor general acted within his rights is scheduled for June 26.

“MTN maintains that it is fully compliant with Nigerian tax laws. The company remains committed to meeting its fiscal responsibilities and contributing to the social and economic development of Nigeria,” MTN said after Tuesday’s ruling.

In the commercial capital Lagos, lawyers for the opposing sides had argued over whether or not the telecoms firm responded to the tax bill within the three-month period stipulated by law. The judge ruled that said MTN had responded in 19 days.

In a separate case, MTN agreed in December to make a $53 million payment to resolve a dispute over dividend repatriation.

MTN shares in Johannesburg were up 0.7% at R104.37 by 1338 GMT.

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