MTN comes clean on Nigeria

Johannesburg, 12 Feb 2008

Middle East and African telecommunications player MTN has told shareholders that a transaction involving 9.45% interest of its Nigerian operations has been completed.

MTN`s portion of the deal saw the company dispose of 5.96% interest in the company for a consideration of $594.5 million, or R4.58 billion at today`s exchange rate. This brings its interest in the Nigerian operation down to 76.08%.

ITWeb first reported in December that rumours had emerged that the company was in discussions with several Nigerian players to orchestrate such a deal. The following day, the cellular operator admitted it was under way with a private placement to increase local ownership of the operation.

Yesterday, the company told shareholders that Nigerian individuals and key institutions have acquired a 9.45% interest in MTN Nigeria from MTN. This was orchestrated through the group`s wholly-owned subsidiary, MTN International Mauritius, and other shareholders in MTN Nigeria.

MTN said the rationale for the transaction was in line with its stated intention of "broadening the ownership of MTN Nigeria among Nigerian citizens and institutions". This reaffirmed its commitment to enabling greater Nigerian representation in MTN Nigeria.

MTN is believed to be reviving its bid for local fixed-line operator, Telkom. However, a local analyst says it`s impossible to determine whether the Nigerian transaction will deliver additional cash to MTN.

"We can`t say whether this money could help MTN in its bid for Telkom, for the simple reason that the financing details were not disclosed. If MTN is providing vendor financing, then it`s possible that there will be no immediate addition to its cash flow," he said.