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South Africa’s MTN Group has made a new offer to sell 1,57 billion shares in its Ugandan subsidiary at a substantial discount in a bid to comply with a requirement to offload a minimum stake of 20 percent to minority investors.
The multinational managed to sell a 12,97 percent stake in MTN Uganda in November 2021 through an initial public offering (IPO) that was priced at Ush200 ($0,053 at current exchange rates).
The company has now offered shares amounting to a 7,03 stake in the secondary market, aiming to comply with Uganda’s local ownership rule in a transaction that is also open to investors in Kenya and other foreign jurisdictions.
To attract investors, the offer that opened Monday, May 27, has been priced lower at Ush170 (US$0,045) per share to closely track MTN Uganda’s stock price in recent months. The telco’s shares have been suspended starting Monday to June 12.
The multinational has also offered 30 free shares for every 140 shares that an investor applies for in a transaction that could see it raise up to Ush220,4 billion (US$58 million).
The incentive shares amount to an effective discount of 17,64 percent on the offer price, making it more generous than the IPO when the free shares represented a discount of between five and 10 percent.
In addition, the book closure date for MTN Uganda’s final dividend of Ush6,4 (US$0,002) per share has been extended from June 4 to June 12 to enable investors participating in the secondary share sale to qualify for the payout.
The offer closes on June 10. Investors will apply for a minimum of 1,400 shares and those seeking more units are required to apply in multiples of 420 shares.
There is no limit on the number of shares an investor can apply for in the transaction.
Institutional investors will not be allowed to sell the shares they buy in the secondary offer. — Business Insider Africa.
Online Reporter