MTN International, based in Johannesburg, has initiated an IPO offering bonus shares to Kenyan investors for a 20% stake in MTN Uganda, valuing the transaction at $250 million—the second-largest East African IPO after Safaricom's 2008 listing.
MTN Uganda CEO Wim Vanhelleputte emphasized the initiative's goal to broaden shareholder diversity and strengthen community ties, following Kenya's capital markets regulator approval for the Kenyan marketing campaign. "We are inviting investors from Kenya and East Africa to widen our shareholding, have more appeal, and give back to the community where we operate," he stated.
Uganda Licensing Requirements Deadline Set for June 2022 ¶
The IPO, scheduled to list on the Uganda Securities Exchange (USE), requires MTN Uganda to expand its shareholder base and network coverage by the June 2022 deadline as part of its licensing obligations. "We have to fulfill these conditions by June 2022 and give back to the community where we operate by having local ownership," Vanhelleputte said.
The offering includes 4.4 billion shares at 6.25 Kenyan shillings each, with Kenyan investors receiving 5 bonus shares for every 100 purchased. Stanbic Bank Uganda will manage the IPO process, including refund disbursements, with share allotment scheduled for December 3, 2021, and listing on December 6, 2021.
Economic Growth and Market Potential ¶
Vanhelleputte highlighted Uganda's demographic and economic advantages, noting a youthful population, 5-6% GDP growth, and upcoming oil production as key drivers for expansion. He cited mobile phone penetration at 9.5 million subscribers and smartphone ownership at one-third of adults.
"We anticipate exponential growth in mobile money transactions and merchant adoption," he said, while confirming MTN International will retain 76% ownership after the stake sale. The IPO is projected to double the Uganda Securities Exchange's size upon completion, with proceeds funding a 1 trillion Ugandan shilling network expansion.
Investment bank Dyer & Blair issued an over-weight recommendation, citing a 9.4% upside potential from the offer price. MTN Uganda's market share grew from 47% in 2016 to 59.1% as of June 2021, with projections reaching 62% by 2023 as competitors exit the market. The company's market share stood at 50% in 2020, according to analysis.
