IPO Not Threat To Cedi Depreciation—MTN CEO Speaks

Some government experts and officials are apportioning blames on the issuance of the MTN Initial Public Offer (IPO) as one of the causes of the cedi depreciation over the last few months.

According to critics, the repatriation of the proceeds from the IPO by MTN resulted in the swapping of the local currency making the dollar an essentially scare commodity on the foreign exchange (forex) market.

Even though there is an indication of a marginal improvement in the cedi’s performance, the currency is still struggling to stabilize against major ones like the dollar.

The new Chief Executive officer of MTN Ghana, Mr. Selorm Adadevoh has debunked those claims indicating that the company has not repatriated any proceeds from the IPO since the transaction period has not elapsed.

He noted that the MTN IPO which was launched on 29th May 2018 was supposed to run for 8 weeks to July 31^st this year.

“Once we get final determination of the proceeds we will go back to Bank of Ghana to discuss the actual fact based on what the process should be. So we definitely going to comply with what the BoG deemed necessary to ensure the right thing is done regarding the repatriation of the proceeds,” he intimated.

The Chief Finance Officer, Modupe Agbolade Kadri said until the process has ended, proceeds from the IPO will still be held at the custodian bank outside the control of MTN.

“We cannot repatriate any fund because the process has not been closed. The way things work is that funds are held with the custodian bank and it is until after the close of the IPO and we get the regulatory approvals then we can move to the funds. Even the funds are not in MTN’s care which is practically part of the rules. So there is no question of repatriation and repatriation only happens after engagement with the BoG when the process for the IPO has ended,” he posited.

Mr.Kadir added that they have had some engagements with BoG on measures to address the timelines for the repatriation of the proceeds.

“We have engaged the Bank of Ghana at the higher levels. In our engagement of the Treasurer at the BoG, what we are clear about is that they have agreed to support the repatriation. MTN is not talking to any bank regarding the proceeds.

...We are only talking to the BoG which they have assured us their support in repatriating the proceeds. In that discussion, there were unknown issues regarding the number of subscriptions and the total amount involved. When the IPO closes we are going to have another engagement with BoG and they will be able to tell us what exactly can be done,” he emphasized.

Dividend Payout
The Advisor to MTN, Eric Appiah indicated that the track record of MTN Ghana is enough to make one believe that there is nothing to be hidden from shareholders who may be interested in knowing how much dividend is declared by MTN Ghana.

“The process and information put out are very transparent. Those things should send a signal to the people that this is something we are committed to and takes seriously. It is hard to put out our dividend payout target if we didn’t have the objectives to actually continue to meet those targets and the targets have been well publicized in the prospectus,” he stated.

In addition, the Chief Finance Officer of MTN, Modupe Agbolade Kadri intimated that the fear that MTN may not declare the dividend is non-existent based on their solid foundation.

“In the prospectus, you will find out that our aspirations are 60percent dividend payout from the current average of 55percent thus actually increasing. We are selling 35percent of the shares but the remaining 65percent is still owned by the major shareholder and therefore will be interested in ensuring that cash flows from their operations. So that risk doesn’t exist as long as the business remains on solid foundations we should be able to meet our proposed dividend payout,” he emphasized.

The CEO of MTN indicated that this is the largest IPO in the history of the Ghana Stock Exchange (GSE) which will increase the activities on the equity market and also send a very strong signal of the fundamentals of the economy to foreign investors.

Aside the Mobile Money, which is the first step through which ordinary citizens can purchase shares in MTN Ghana in the easiest way, the CEO of MTN Ghana noted that they also introduced a shortcode (*533#) where people can actually download the prospectus as well as on mtnghanashares.com.

“The philosophy on this journey, according to him, is that the many equity rounds that the GSE has participated turn to be a facility targeted at the higher level of Ghanaians hence the reason for this all-embracing to allow the ordinary Ghanaians to own shares in the company,” Mr. Selorm Adadevoh stated.

He indicated that confidences are high regarding the number of subscriptions especially through the Mobile Money platform which is the first of its kind in the world.