MTN Nigeria shares shed 10% after IPO pricing By Reuters

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© Reuters. FILE PHOTO: The logo of MTN is pictured in Abuja, Nigeria, September 11, 2018. REUTERS / Afolabi Sotunde / File Photo

ABUJA (Reuters) – Shares in Nigeria’s second largest publicly traded company, MTN Nigeria, fell 10% to a five-week low on Wednesday after the company set a public offering price that was below the stock market price.

The South African telecommunications group MTN opened its offer to retail investors on Wednesday at a price of 169 naira per share for the sale of up to 575 million shares in MTN Nigeria.

The public offering, which ends December 14, is the first phase of a share sale to retail investors in which the South African company will seek to reduce its stake in MTN Nigeria from 78% to 65% over time, MTN Group Chief said Executive said Ralph Mupita at a road show in Abuja.

The chairman of the MTN Group, Mcebisi Jonas, took part in the roadshow, which took place on the sidelines of a state visit by the South African President Cyril Ramaphosa.

The decline in MTN Nigeria stocks pushed the main stock index 1.8% to a three-week low.

MTN listed its Nigerian store in Lagos two years ago at 90 naira each, making it the second largest stock by market capitalization.

In March 2020, shares of MTN Nigeria fell back to the listing price due to bans to slow the spread of the coronavirus.

There have been few IPOs in Nigeria since the 2008 global financial crisis, which wiped out more than 60% of market capitalization.

The MTN offer includes one bonus share for every 20 shares purchased, an incentive for private investors who hold shares for at least 12 months after allocation.

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