MTN nears Nigeria deal over $8.1b claim

MTN nears Nigeria deal over $8.1b claim
Source: Bloomberg
Date: 09-11-2018 Time: 01:11:23:pm

MTN Group Ltd. is close to securing a deal with Nigeria’s central bank over an order to repay $8.1 billion it is alleged to have illegally taken out of the country, according to a person familiar with the matter.

A settlement is expected by Monday and could come as early as Friday, said the person, who asked not to be identified because they’re not authorized to comment publicly. The Central Bank of Nigeria will on Friday meet the four banks accused of facilitating the transfers -- Standard Chartered Plc, Citigroup Inc., Stanbic IBTC Plc and Diamond Bank Plc -- and that Lagos meeting could end the saga, the person said.

The shares rose 2.2 percent to 88.83 rand in early trade in Johannesburg on Friday, valuing Africa’s largest wireless carrier by subscribers at 167 billion rand ($11.8 billion). The stock has declined 17 percent since Nigerian authorities said in late August that MTN needed to repay the cash. The four banks were fined a combined $16 million.

MTN, Citibank, Standard Chartered and Stanbic IBTC declined to comment. A spokesman for Nigeria’s central bank and representatives from Diamond Bank didn’t answer calls seeking confirmation after regular business hours.

Court Case

If a deal is reached, MTN will probably dismiss its court case against the central bank and Nigeria’s attorney general, which it brought to stop the transfer order, according to the person. However, the company is facing a separate Nigeria claim that it owes $2 billion in back taxes in the country, and this would still have to be resolved.

MTN Chief Executive Officer Rob Shuter was in Abuja, the Nigerian capital, on Thursday to meet Central Bank Governor Godwin Emefiele to discuss the fines, Lagos-based newspaper ThisDay reported, citing sources it didn’t identify.

The clash over repatriated funds and tax payments is the second damaging dispute in three years between MTN and authorities in Nigeria, where it has about 64 million subscribers. In 2015, the wireless operator was fined $5.2 billion for missing a deadline to disconnect subscribers who weren’t registered in the country. The penalty was later reduced to about $1 billion alongside a commitment by MTN to sell shares in its Nigeria unit in Lagos.

MTN remains committed to the listing, the company said last month. Its business in Africa’s most populous nation continues to thrive, with third-quarter service revenue increasing by 17 percent year-on-year with a margin of 43 percent on its earnings before interest, taxes, depreciation and amortization. The shares have done less well, and the company’s value is less than half what it was before its first Nigerian crisis.