MTN Group plans to raise $4bn by divesting 14% stakes in Nigeria business

MTN Group Ltd. is planning to sell a portion of its majority shares in the Nigerian unit and divest its stakes in a major towers business IHS in a bid to raise $4 billion.

According to the mobile-phone company, it plans to sell around 14 per cent stakes in the Nigerian unit to reduce holdings to about 65 per cent at the end of the exercise.

The company said it plans to sell its stakes in IHS Holdings Ltd., the continent’s largest operator of wireless towers.

MTN stake in IHS is worth around 23 billion rands in June, a spokeswoman said.

Africa’s biggest mobile-phone company has generated about 14 billion rands since kicking off a strategy to offload non-essential businesses in March, and is ready to step up the process, MTN said in an emailed response to questions by Bloomberg on Thursday.

MTN is also looking to reduce majority ownership of its business in Nigeria, the carrier’s biggest and most profitable market, after the country’s attorney general dropped a claim for $2 billion in back taxes.

About 14 percent of the Lagos-listed operation could be sold, MTN said, reducing the stake to about 65 percent.

MTN is raising money to pay down debt and simplify a portfolio of telecom businesses that spreads across Africa and the Middle East.

The company is also focusing investment on its main markets — including $1.6 billion for Nigeria announced on Wednesday — and is “seriously investigating” the prospect of taking part in a planned privatization of Ethiopia’s phone monopoly, according to the spokeswoman.

MTN shares gained as much as 2 percent after the report of the asset sales was published, and traded 0.4 percent higher as of 2:55 p.m. in Johannesburg.

MTN Nigeria share price closed flat at N120 per share on the floor of the Nigerian Stock Exchange (NSE) on Thursday.

IHS is reviving plans for an initial public offering, people with knowledge of the situation said last year, after scrapping a U.S. share sale in 2018.

The Mauritius-based company declined to comment.

MTN has sold minority stakes in two tower joint ventures for $523 million, redeemed preference shares in Nigeria and offloaded e-commerce businesses such as booking site Travelstart since starting the sale program last year.