MTN is dropping its court case against the Nigerian government, and has paid, without prejudice, a ‘good faith’ sum of R3.8 billion in the hope that it can reach a settlement over its R60 billion fine in the country.
MTN has announced that it has made a “good faith” payment of 50 Billion Naira (US$250 million) to the Federal Government of Nigeria on the basis that this will be applied towards a settlement.
Further, in an effort to achieve an amicable settlement, MTN has agreed to withdraw the matter from the Federal High Court in Lagos, it said.
Phuthuma Nhleko in his capacity as Executive Chairman of MTN Group and a director of MTN Nigeria is continuing to lead the team engaging the Nigerian Authorities with a view to settling the matter, MTN said.
The Nigerian Communication Commission (NCC) fined MTN ₦1.04-trillion (around R71-billion at the time) in October 2015 for not disconnecting unregistered SIMs on its network.
After negotiations with Nigerian authorities, the fine was reduced by 25% to ₦780-billion.
The ongoing matter had a massively negative impact on the group’s financials, leading to an expected 20% drop in headline earnings for its latest financial year.
Nigeria makes up for nearly 40% of MTN’s sales.
The group warned shareholders to exercise caution in dealing with its shares while the matter continues.
MTN’s share price jumped 4.5% from R125.10 before to R130.76 after the announcement.