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Confusion among MTN share buyers, as uncertainty threatens eight weeks gain

Confusion among MTN share buyers, as uncertainty threatens eight weeks gain

One month after MTN International Limited conducted an initial public offering of its shares in MTN Nigeria, investors who participated in the exercise are yet to receive their assets from the company.

Ripples Nigeria had reported back in November that MTN International, the majority shareholder (on behalf of MTN Group South Africa) of MTN Nigeria was selling off 575 million ordinary shares to Nigerian retail investors.

The telecommunications firm opted to sell the stock at N169 per share, against the N190 per share the stock worth at the time [a difference of 11.05 percent]. The share was oversubscribed within the two weeks exercise.

This led capital market exchanges to stop offering the shares before the final day of the share offering, December 14, 2021. Despite closing the sales window earlier, Ripples Nigeria has confirmed that MTN Nigeria is yet to allot shares to the prospective investors.

Some of the investors who spoke with Ripples Nigeria said they are yet to collect the stock they acquired, and Ripples Nigeria understands this is due to late approval from the securities regulator.

MTN is still awaiting the approval of the Securities and Exchange Commission (SEC), but this delay has raised questions on the impact the late confirmation will have on investors.

READ ALSO: Chaka to refund buyers of MTN Nigeria shares as primary offer ends

Investment gains hang for prospective investors.

Following the commencement of the share offering on December 1, 2021, the stock value of MTN Nigeria rose from N169 per share, to N190 as of January 21, 2022.

But with the company yet to allot shares, it’s not known if the 11.05 percent gain (N21 gain for every share) recorded within this last eight weeks will reflect on the stock when the prospective investors finally obtain their assets.

Note that shareholders that purchased the shares during the IPO have gained N12.07 billion (if the 11.05 percent hike is reflected), as their total investment increased from N97.17 billion to N109.25 billion.

However, the gain in share usually affects allotted stocks, which means only current holders of MTN Nigeria shares have benefited from the stock appreciation so far.

MTN Nigeria had stated last week that it will provide more information when approvals have been given by the capital market regulator.

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