MTN pays R25 billion to settle Nigerian fine – share price surges

MTN says it has resolved a dispute with the Federal Government of Nigeria (FGN) and has agreed to pay a total cash amount of 330 billion naira over three years  – the equivalent of R25 billion.

Shares in the company advanced 13.5% in midday trade on the JSE, to R140.37.

The Nigerian Communication Commission (NCC) hit MTN with a $5.2 billion fine last year, for failing to disconnect more than five million unregistered SIMs on its network.

This fine was later reduced by 25%, but MTN elected to take the matter to Nigeria’s courts.

It later dropped the case and paid a “good faith” sum of ₦50 billion (R3.8 billion at the time) in an effort to achieve an amicable settlement.

The ₦50 billion (R3.8 billion) paid in good faith and without prejudice by MTN Nigeria on 24 February 2016 forms part of the monetary component of the settlement, MTN said in  a statement on Friday – leaving a balance of ₦280 billion outstanding which will be discharged as follows:

  • ₦30 billion (R2.3 billion)on 8 July 2016
  • ₦30 billion (R2.3 billion) on 31 March 2017
  • ₦55 billion (R4.1 billion) on 31 March 2018
  • ₦55 billion (R4.1 billion)on 31 December 2018
  • ₦55 billion (R4.1 billion) on 31 March 2019
  • ₦55 billion (R4.1 billion)on 31 May 2019

MTN Nigeria has agreed to take immediate steps to ensure the listing of its shares on the Nigerian Stock Exchange as soon as commercially and legally possible after the date of execution of the settlement agreement.

“MTN Nigeria shall always ensure full compliance with its license terms and conditions as issued by Nigerian Communication Commission,” the company said.

MTN Group executive chairman Phuthuma Nhleko said: “he expresses his thanks and gratitude to the FGN for the spirit in which the matter was resolved and believes this is the best outcome for the Company, its stakeholders, the FGN and the Nigerian people and that the relationship between MTN, the FGN and the NCC has been restored and strengthened.”

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MTN pays R25 billion to settle Nigerian fine – share price surges