MTN Group CFO: Market conditions not yet conducive for Nigeria IPO

MTN Group, a major telecommunications operator in Africa, is facing challenges due to current market conditions that are impeding its plans for an initial public offering (IPO) in Nigeria. In an interview with CNBC Africa, MTN Group CFO discussed the impact of recent developments in the oil market on telecom operators, highlighting the uncertainty surrounding oil prices and its potential effects on business operations. While projections suggest a possible rebound in oil prices, factors such as currency fluctuations and the coronavirus outbreak are creating additional hurdles for the telecom giant. The CFO emphasized MTN's focus on strategic progress and financial performance, despite the market challenges. The company reported strong commercial momentum and highlighted its resilience in the face of potential financial fluctuations. However, the CFO acknowledged the need for contingencies, citing scenarios that could impact the business, such as currency devaluation and supply chain disruptions. One key concern for MTN is its exposure to Nigeria and South Africa, especially in light of potential economic downgrades and rating agency warnings. Moody's has expressed reservations about the economies of both countries, which could affect MTN's plans to reduce its debt levels. Despite the uncertainties, the CFO remains optimistic about the company's ability to navigate these challenges and maintain its financial stability. Moreover, the CFO discussed MTN's expansion plans in other African markets, including Ethiopia and Uganda. While Ethiopia presents a lucrative opportunity for growth, the company is cautious in assessing the investment case and ensuring financial viability. In Uganda, MTN aims to increase local ownership in its operations, reflecting a broader strategy to engage with local communities and stakeholders. As for the Nigeria IPO, MTN remains committed to increasing local ownership, but market conditions have delayed the process. The company aims to raise local ownership from 21% to 35%, positioning it in line with industry standards. However, challenges related to regulatory issues and market volatility have postponed the IPO launch. MTN continues to work on preparations, mobilizing teams and advisors to ensure a smooth transition when the conditions become favorable. In conclusion, MTN Group's CFO acknowledges the complexities of the current market environment and remains proactive in addressing potential risks and opportunities. While the Nigeria IPO may be on hold for now, the company's strategic focus on financial stability and long-term growth positions it well to withstand market fluctuations and drive sustainable value for investors.