MTN’s Public Offer Oversubscribed by 139%
The Series 1 offer for sale of 575 million shares held by the MTN Group to Nigerian investors, which held last December, has been successfully completed and was oversubscribed by 139.47 per cent. This was an additional 82.25 million MTN Nigeria shares.
A statement from the telecommunication company explained that the oversubscription raised the initial number of shares sold from 575 million to a total of 661.25 million shares.
The offer was implemented by way of a book-build to qualified institutional investors and a fixed price offer of N169.00 per share to retail investors.
According to the statement, the breakdown of the sale showed that approximately 76 per cent of successful applicants via digital platform were women, while 85 per cent of the sale was from persons under 40 years of age.
Following the successful completion of the offer, “MTN Group’s shareholding in MTN Nigeria reduced by 3.25 percentage points, from 78.83 per cent to 75.58 per cent.”
According to the statement by MTN Nigeria, signed by the Company Secretary, Uto Ukpanah, the offer was oversubscribed with valid applications for a total of 801.97 million units, leading to the activation of the approved 15 per cent over-subscription clause of an additional 86.25 million MTN Nigeria shares.
It said, “In all, 661.25 million MTN Nigeria shares were allotted. A total of 126,720 retail investors submitted valid applications and received full allotment.
“Institutional investors, including pension funds, insurance companies, asset managers, corporates, and foreign portfolio investors that participated in the book-build were allotted 72.09 per cent of their applications. This includes Nigerian pension funds representing approximately 6.5 million Nigerian contributors.
“In line with the innovative incentive structure of 1 free share for every 20 purchased, subject to a maximum of 250 free shares per investor, an additional 4.28 million MTN Nigeria shares will be allotted to qualifying investors who hold the shares allotted to them for 12 months till 31 January 2023.”
The statement also said MTN Group adopted a unique structure in the offering by determining a fixed price of N169 per share for the retail offer through a book-build to qualified investors that was completed on November 26, 2021. The fixed price offer to retail investors was at a discount of 11 per cent to the closing price of MTN Nigeria stock on the day the book-build was completed.
The offer commenced on December 1, 2021, and was completed on December 14, 2021.
Nigerian investors across the country supported the Offer through multiple channels – Receiving Agents, Issuing Houses and Primary Offer (a digital application platform).
MTN said, “The offer is a landmark transaction and a true reflection of Nigerian investor confidence in MTN Nigeria. It marks the first time a digital application platform was used to democratise investing in a public offer and maximise investor participation across the country.
“More than 89 per cent of retail offer subscribers applied through the Primary Offer platform (mobile and web), and 114,938 new Central Securities Clearing System (CSCS) accounts were opened by first-time investors.”
CEO of MTN Group, Ralph Mupita, said, “We are pleased that this offer has given so many Nigerians the opportunity to become owners of MTN Nigeria.
“With over 6.6 million Nigerians directly or indirectly becoming shareholders in MTN Nigeria, the objective of broadening the shareholder base, and creating shared value has been achieved. We are proud that our offer was the first Nigerian public offer to use the digital application platform, primary offer, which enabled wider investor participation across Nigeria. We thank the Nigerian authorities for their support of this offer. We remain committed to playing our humble role in driving digital and financial inclusion in Nigeria over the medium.”
Commenting on the offer, the CEO of MTN Nigeria, Karl Toriola, said, “We are delighted to welcome so many new shareholders to the MTN family, up 11.6 times from the number before the offer.
“It has been inspiring to see so many Nigerians, many of whom are young, acquire shares for the first time, and use a digital platform to do so. This is the beginning of a journey to broaden our shareholding and there will be more opportunities to participate.
“We are pleased with the level of digital innovation we championed with this offer with the active collaboration of our lead issuing house and the various regulatory bodies. Deepening retail participation in Nigeria’s capital markets is a process, and we are off to a great start, demonstrating the role digital platforms can play in expanding access.
“I am particularly pleased that we completed this transaction in an accelerated time frame ensuring new shareholders can realise value almost immediately through participation in our 2021 full-year dividend.
“I would specifically like to thank the Minister of Communications and Digital Economy, Dr. Isa Ibrahim Pantami, the Nigerian Communications Commission and the wider federal government for the opportunity to execute this Offer.
“I thank the Securities and Exchange Commission, the Nigerian Exchange Limited, the CSCS, and all the parties involved for their support in delivering this ambitious Offer structure.
“I also appreciate our staff who worked tirelessly with our advisers on this project. Most of all I would like to thank our new shareholders for having confidence in us and in our future. We are delighted to have you on board for this journey to building a digital future together.”
The CEO of Chapel Hill Denham, the Lead Issuing House, Bolaji Balogun, said, “Chapel Hill Denham is honoured to have worked with MTN to complete Nigeria’s first digital and predominantly green offering. I wish to thank the SEC, the NGX, the CSCS, all the professional firms and other stakeholders, for delivering a big win for Nigeria’s capital markets in enabling the adoption of primary offer and this transaction marks a new and exciting future.
“Over 90 per cent of subscribers to the offer were first time participants in the capital markets and MTN Nigeria’s strong investment case made this possible.”
Chief Executive Officer, Nigerian Exchange Limited (NGX), Temi Popoola, said, “The NGX is proud to have worked with MTN Nigeria, Chapel Hill Denham and other parties to the transaction in advancing Nigeria’s capital market through the adoption of forward-looking technology.
“In the NGX era, we are resolute in our commitment to democratise finance in Nigeria in order to ensure every type of investor has access to public markets where they can invest in companies they believe in and reap value.
“With the digitised MTN Nigeria offering, we have made a tremendous stride in our plans for a full digital transformation of the Nigerian capital markets and we look forward to building on this.”
Similarly, CEO of Central Securities Clearing System Plc, Haruna Jalo-Waziri, said, “We are excited to be part of the innovation brought by the offer, which afforded the successful launch of primary offer digital application platform.
“This further buttresses the necessity for digital transformation, allowing market access for all categories of investors, including institutional and retail investors within and outside of the country.
“At CSCS, digital transformation has been the core of our strategic direction. We will continue to collaborate with our participants, issuers and other stakeholders to efficiently and effectively ease market access with innovative solutions through the investment cycle.”
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