IPO ALERT – Namibia is gearing up for its biggest initial public offering (IPO) when Government sells 49% of the leading telecommunications company MTC Namibia. The IPO prospectus is set to be published on 20 September and the share offer will open the same day and is likely to close at 12 noon local time on 1 November. The aim is to complete the listing on the Namibian Stock Exchange (NSX) before the end of November 2021.
Government has budgeted to raise N$1.5bn from the listing ($90m) but the number could be much higher.
The share offer will be open for domestic and international investors. Namibia Post and Telecommunications Holdings Limited (NPTH), which is a 100% state-owned enterprise (SOE), will retain 51% of the shares. The listing prospectus was registered by Namibia’s Registrar of Companies on 19 August.
According to MTC’s annual report for the year to September 2020, revenues were N$2.68bn (USD $160.7m), up 2.7% on the previous year, and earnings before interest, tax, depreciation and amortization (EBITDA) of N$1.4bn were up 3.8% “despite listing costs and the impact of (International Financial Reporting Standard) IFRS 16”.
However net profit after tax (NPAT) was down 3.8% to N$772m ($46.2m) “due to higher depreciation due to capital expenditure over the past three years”. Revenues were up due to “2% growth in active customer numbers and 22% growth in data revenue” including because of working from home. Blended average revenue per user (ARPU), excluding handset revenue, was N$87.50 ($5.24).
Nearly N$1bn in dividends
MTC paid dividends of N$977.8m for the year, including a special dividend of N$400m in December 2019. The rest of the dividend, at N$577.8m, is up strongly from N$413m (2019) and N$374m (2018).
MTC has 91% share of the Namibian market with 2.58m (up by 2.1%) subscribers. Mobile network covers 97% of the population in the large country, with 100% planned by 2023, and mobile broadband covers 87%. MTC was first established by Swedfund and Telia with NPTH and in 2004 they sold their shareholdings to NPTH. Portugal Telecom invested in 2006 and sold the shares back to NPTH after 2016.
“We take great pleasure to invite you to share in the prosperity by subscribing for shares in this truly Namibian company. The listing will provide an opportunity for all MTC customers, staff, stakeholders, and the public in general, to acquire MTC shares and participate in the ownership of MTC,” said the MTC statement.
How to invest
If the public offer is oversubscribed the order of the allocation process will be first to previously disadvantaged Namibians, then to MTC staff and customers, followed by Namibian natural persons and corporates, and finally to Namibian institutions and SADC and international investors.
Shareholding applications for the general public will be made available online on the MTC website from 20 September 2021 at 9:00, or by collecting a prospectus, and completing and submitting an application form at any mobile home, selected Nampost outlets or a stockbroker.
According to news reports, the Government Institutions Pension Fund (GIPF) will be allotted 20% stake and MTC’s 670 staff are expected to be allocated shares under an employee benefit scheme.
The listing was initially due in in March 2020 but was delayed due to the COVID-19 pandemic and in order to achieve good value for the Government owner. MTC appointed IJG Securities and PSG Wealth Management (Namibia) as Sponsoring Brokers.
Comment – Many people have called on African governments to sell parts of their SOEs and list them on the stock exchange, to give more avenues for domestic savings and to deepen capital markets while raising funds to cut debt or spend on infrastructure. CONGRATULATIONS TO THE NAMIBIAN GOVERNMENT, THE NSX AND ALL AT MTC NAMIBIA ON ACHIEVING THIS MILESTONE!