MTN has told shareholders to be wary of media reports that say it proposed to pay 300 billion naira ($1.5 billion) to settle a $3.9 billion fine in Nigeria.
On Thursday evening, Bloomberg reported that MTN had proposed several steps in paying off the fine, but didn’t cite any source for the information.
According to the report MTN would:
- Pay $1.5 billion on top of the recent $250 million “good faith payment”
- Another $500 million paid over 5 years
- A pledge to purchase $400 million of Nigerian sovereign debt issued on international markets in 2016-2017
- Government access to its fiber network until 2020, an offer valued at$350 million
This would amount to a total of $3 billion (R46 billion) paid by 2020.
MTN told Bloomberg that it could not confirm or deny the figure, but in a SENS announcement on Friday, the group told shareholders to proceed with caution:
“MTN is aware of the various reports which appeared in the press yesterday regarding the fine. MTN has previously advised shareholders not to make decisions based on press reports and MTN again urges its shareholders to refrain from doing so,” it said.
“Shareholders are therefore advised to continue to exercise caution when dealing in the Company’s securities until a further SENS announcement is made by MTN.”
MTN in Nigeria
Nigeria’s Senate Committee on Communications met on Thursday and concluded that the negotiations with MTN must continue.
The Nigerian Communication Commission (NCC) fined MTN ₦1.04-trillion (around R71-billion at the time, or ±R80.8-billion today) 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 (now around R60.6-billion).
Dissatisfied with the outcome, MTN opted to take the matter to court in Lagos.
However, the operator then dropped its court case and paid a ‘good faith’ sum of R3.8 billion in the hope that it could reach a settlement.
MTN said on 24 February, that it paid 50 Billion Naira (US$250 million) to the Federal Government of Nigeria on the basis that this will be applied towards a settlement.