Wim-Vanhelleputte MTN Uganda Sets Its Share Price (1)
In its IPO, MTN Uganda will sell a 20% stake, priced at 200 Ugandan Shillings per share. (In Photo: MTN CEO Wim Vanhelleputte)

MTN Uganda has set the price of its IPO for the sale of a 20% stake in the company at 200 UGX per share.

MTN Uganda has set the price of its initial public offering for a 20% stake in the company at UGX 200 per share ($0.055).

The MTN IPO is open and will close on November 22. The stock will begin trading on December 6th.

MTN Uganda is issuing 4.5 billion shares, according to Vanhelleputte, after the MTN Group’s Uganda unit received regulatory approval last week.

This would value the stock at $250 million and MTN Uganda at $1.25 billion.

The telecoms company, which has 15 million members, also provides mobile money financial services, which Vanhelleputte claims is the company’s fastest-growing segment as more individuals seek cashless transactions in the wake of the COVID-19 outbreak.

India’s Bharti Airtel is MTN Uganda’s primary competitor. After a smaller competitor, Africell, announced its exit from the market, it may be able to gain additional subscribers.

MTN Uganda, which began operations in 1998, was granted a 12-year license renewal in June 2020 after paying $100 million and agreeing to list at least 20% of its shares on the local stock exchange, which presently has 17 stocks.

MTN Uganda stated that the allocation outcome would be announced on December 3rd.

MTN Uganda is now controlled by MTN Group (96.01%) and Charles Mbire, a businessman (3.98 per cent).

Ugandans and inhabitants of other East African Community member nations can participate in the IPO. The offer is open to foreign investors as well.

Ugandan investors, on the other hand, are given first preference in the share sale.

Institutional investors are expected to benefit the most from the reductions, which might total hundreds of millions of shillings.

Ugandan retail investors who apply for an aggregate minimum value of $1,400 will receive all of the shares for that amount, plus the number of incentive shares they are entitled to, subject to the entire number of offer shares available.

For retail investors, all applications with an aggregate minimum value of $1,400 will be assigned all of the shares and the related incentive shares on a pro-rata basis.”

MTN will decide the pro-rata distribution of incentive shares based on the allocation priority “and in such a way that persons within the same group of applicants are treated fairly and equally concerning their applications.”

The IPO might be Uganda’s largest ever, providing a significant boost to the country’s stock market, which now has 40,000 investors trading only 17 stocks.

To allow local ownership of large enterprises with few large shareholders, the Ugandan government made the listing of telcos on the local exchange one of its license renewal conditions.

After Safaricom’s IPO on the Nairobi Securities Exchange in 2008, MTN Uganda will become the EAC’s second publicly traded telecom.