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Ugandan telco woos Kenyans on Sh27.6b IPO

By Graham Kajilwa | Nov 10th 2021 | 2 min read
By Graham Kajilwa | November 10th 2021

MTN Uganda shop. [Courtesy, Standard]

MTN Uganda has underlined the potential in internet and mobile money transfer business as it woos Kenyans to subscribe to its Sh27.6 billion initial public offering (IPO).

The telco says the mobile money market has an opportunity to grow to 500,000 merchants from the current 45,000, and fixed internet numbers to shoot up from the current 3,000 to 3,000,000.

While the East African Community countries have up to November 22, to grab a share of the firm’s business, only Tanzania and Kenya have given a ‘no objection’ to the IPO.

The rest of the countries, according to the IPO’s broker, are still ironing out some issues.

“The goal is to have the approval as soon as possible,” said SBG Securities (Uganda) Chief Executive Joram Ongura during a marketing forum with investors in Nairobi on Monday.

The IPO follows renewal of MTN Uganda’s license by the Uganda Communication Commission, which was pegged on three conditions, among them offering 20 per cent of shareholding to the public, with Ugandans being given priority.

As a result, MTN Group (South Africa) is putting up 4.5 billion of the 22.5 billion shares it holds in MTN Uganda up for sale.

Shareholding in MTN Uganda comprises 96 per cent under MTN Group and 4 per cent under businessman Charles Mbire.

Interested Kenyans can buy the shares, each at Sh6.30, with bonus shares for every 100.

Investors in East Africa will get five per cent bonus shares when they make their purchase, while Ugandans will get 10 per cent when they buy through the m-IPO platform.

If they buy traditionally, then the bonus is 5 per cent.

Minimum shares one can buy is 500, which comes to an investment of Sh3,150 (Ush100,000).

“We have made it so affordable. I know even if you were to buy a piece of land, I do not think you can get one for Ush100,000,” said MTN Uganda Chief Executive Wim Vanhelleputte.

He said the IPO was an opportunity to grow the firm’s shareholding to even 50,000.

Mr Vanhelleputte said the future was bright if the country’s population was put in the growth equation, as well as gross domestic product growth at average 5 per cent to 6 per cent due to the newly-discovered oil industry.

He said the potential for mobile data in the next two or three years was 50 per cent to 60 per cent, as the uptake of smartphones shoots up.

Vanhelleputte cited Safaricom’s growth, which is now spilling into other regions, saying there was a lot MTN could learn to spur its growth in Uganda. “We have 45,000 active money transfer merchants while the opportunity is about 500,000. The way Lipa na M-Pesa is everywhere, we hope to deliver a similar model in Uganda with time,” he said.

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