MTN Uganda has picked Kenyan investment bank, Dyer and Blair, to assist with its initial public offering (IPO) guaranteeing the firm.
The $250 million IPO opened on Monday October 11. MTN Uganda said on Monday it had set its initial public offering price at 200 Ugandan shillings ($0.0558) per share.
The firm is offering 20% of its shares to the public. The total number of shares on offer is 4.5 billion, MTN Uganda CEO Wim Vanhelleputte said.
A unit of South Africa’s MTN Group, the firm, which has a subscriber base of 15 million and also offers mobile money financial services, won regulatory approval last week to sell 20% of its shares to the public.
It chiefly competes with a unit of India’s Bharti Airtel and its subscriber base could potentially earn a boost after a smaller rival, Africell, announced it was exiting the market.
MTN Uganda started operations in the east African country in 1998 with a 20-year operating license.
It secured a 12-year renewal of its licence in June 2020 after paying $100 million and one of the conditions for extension of the licence was to list at least 20% of its equity on the stock exchange within two years.
The company’s IPO will be the country’s biggest ever, and MTN Uganda’s shares will be a major boost to Uganda’s Stock Exchange (USE), a small bourse with 38,000 investors trading some 17 stocks.
The shares are now being marketed by Dyer and Blair that is owned by Kenyan tycoon Jimnah Mbaru. Brokers earn commissions based on shares they sell.
Investors can apply for shares through SBG Securities, a subsidiary of South Africa’s Stanbic Holdings Plc and Dyer and Blair which is the lead retail broker.
“MTN Group (has) appointed SBG Securities Uganda Limited as transaction adviser and lead sponsoring broker, S&L Advocates as legal advisers, KPMG Certified Public Accountants as reporting accountant, Crested Stocks and Securities Limited, and Dyer and Blair Uganda Limited as lead retail brokers and Equity Stockbrokers Uganda Limited and UAP-Old Mutual Financial Services Uganda Limited as selling agents,” said MTN Group in the IPO prospectus.
MTN says the legal adviser S&L will take home about $280,000 while the transaction adviser SBG securities will pocket $2 million.
Reporting accountants KPMG will earn $92,000 while MTN will pay $280,000 to the Ugandan Capital Markets regulator for approval. Placement fees at the Kampala bourse are set at $2.7 million.
The IPO is open to Ugandan investors as well as citizens of other East African Community member states, including Kenya. MTN Uganda will sell a fifth of its stake to investors.