Charles Mbire-led MTN Uganda gets thumbs up to market IPO to local investors in Kenya

Uganda’s largest telecom operator MTN Uganda has received regulatory approval from Kenya’s Capital Markets Authority (CMAK) to market its IPO to local investors, as the telecom company prepares to launch the largest-ever IPO in Uganda’s history.

A statement issued by the Uganda-based telecom service provider revealed that the independent state financial regulatory agency provided a “no objection” clause for the firm’s IPO to be marketed in Kenya.

The regulatory approval issued through the “no objection” clause will pave the way to market the company’s shares to institutional and retail investors after the offering opens in Uganda on Oct. 11. The public offering will run until Nov. 22.

MTN Uganda is the fourth operating subsidiary of the South African multinational mobile telecommunications company, MTN Group, to be listed in Africa.

The IPO will see the telecom company offer a total of 4.47 billion shares for sale, which translates to a 20-percent stake in the company at a price of UGX 200.00 ($0.0558) per share.

Each prospective shareholder must apply for at least 500 shares in the telecom outfit. When fully allocated, it will result in a minimum investment of UGX100,000 ($28.16) per shareholder.

Kenyans participating in the listing will require a valid identification national ID or passport to open a Securities Central Depository account with the Uganda Securities Exchange, as this will allow them to apply for the IPO.

In addition, all East Africans who apply for shares will receive five bonus shares for every 100 shares they are allocated.

The listing of the company’s shares will set the parent company, MTN Group, on course to raise UGX895.56 billion ($248.94 million) from the 20-percent stake offered to the public, as it moves to deliver the country’s biggest-ever IPO.

Research conducted by Billionaires.Africa revealed that the Uganda-based subsidiary should derive a valuation of about UGX4.48 trillion ($1.24 billion) from the listing, while Charles Mbire, the chairman of MTN Uganda, is predicted to see his net worth increase by UGX179.11 billion ($49.79 million) thanks to his four-percent stake.

MTN Uganda CEO Wim Vanhelleputte said the decision to float shares on the stock market is part of MTN’s localization agenda aimed at aligning its company’s priorities more closely with the development agendas of its operating markets.