The MTN Ghana's IPO: Come Together And Own 35% Than The Individual Purchases (Reason Behind Their Internal Offer, IPO)
There are 2 ways among many other informal traditional methods that company can raise funds. Going public via an IPO or doing Private Placement. Both ways indirectly or directly raise funds by borrowing funds (BONDS) and /or selling or diluting ownership (SHARES)
In November 2015, MTN Ghana successfully bid for the Licence from the NCA, which took effect from 21 June 2016 and is valid for a renewable period of 15 years.
And this was the Reason why their license Awarded:
The Licence was awarded on condition that MTN Ghana achieve 35% Ghanaian ownership by 30 June 2018 provided that the Listing of the MTN Ghana Shares on the GSE would satisfy this condition.
Pursuant to this and consistent with the MTN Ghana philosophy of making provision for substantial local stakeholder participation, MTN Ghana is making a public offering of up to 35% of its equity through the Offer and the Listing.
This is in line with the vision of enabling Ghanaians to own part of and share in the success of the Company and is also pursuant to the condition of the Licence.
A Smart Condition by our NCA but let look at the shareholder structure before the IPO
Investcom consortium 97.55% (~ Ghc10.49 billion)
MTN Dubai Ltd 0.1% (~Ghc10.7M)
Zent International Ltd 2.35% (~GHc252.86M)
After the IPO , the structure will switch to:
Investcom - 63.01%
Zent International -1.91%
MTN Dubai -0.08%
Aggregated holders of offer shares (Public) - 35%
Both Investcom and MTN Dubai are now subsidiaries of the MTN Group;
In 1994, the Company (then using the trade name “Spacefon”) was authorised to operate and provide GSM mobile cellular services in Ghana
In 1996, Investcom Consortium (a Lebanese-owned company incorporated in British Virgin Islands) acquired the majority shareholding in the Company. The trade name of the Company was subsequently changed from “Spacefon” to “Areeba”.
In 2006, the MTN Group fully acquired Investcom Consortium and subsequently changed the Company’s trade name from “Areeba” to “MTN Ghana”.
Curiously who are the Zent international ltd; the 2.35% Equity Owners of MTN Ghana?
HARD TRUTH & ADVICE FOR YOU :
1. Buy High volumes of Shares to create the right value.
Its prudent to buy reasonably significant amount of shares than a penny. If you don't have such amount , get a group of friends and merge your pennies to purchase significant amount of shares. This will give you a better stake value in the business.
After the IPO, the majority shareholders will have their Equity diluted from 97.55% to 63% which is still controlling than the Public(The Ghanaians whose penny has been aggregate to buy 35%)
In competitive market and bidding like this deal, what prevent us to come together and form a consortium to own the 35%? This is the best and closest way, Ghanaian can actually have a significant say in the decision making of MTN Ghana simply cos a scattered penny shareholders are not unified enough to represent a formidable voting power on the table.
I Will not be surprised to see more Ghanaian companies as new shareholders.
2. In case you want to participate in the IPO, kindly consider these;
* Don't focus on the assets value of the existing shareholders but rather focus on that of the MTN Ghana and their historic net profit performances. The reason is so simple , Investcom consortium , Zent and MTN Dubai are not the businesses we are investing in but they are just like any potential shareholder like you , who want to purchase the offer shares.
* Ask yourself if MTN Ghana will still be the most profitable and growing business in Ghana.
*Understand that shareholders only receive dividends when profits are declared.
And that shareholders can at any right time offer portion or all of his or her shares for returns.
Justice Offei Jr
Columnist I Award Winning Entrepreneur I Consultant
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