The shares of MTN jumped for the second consecutive time on Monday, January 25 at the Johannesburg Stock Exchange (JSE).
This rally came following news that its Nigerian operation has been given 60 days to seek an out of court settlement with the telecommunications regulator, Nigerian Communications Commission (NCC).
In yesterday’s trading, MTN shares advanced 2.65 per cent to Rand 126.25 as at 10h30 South African time.
Last Friday, MTN which derives 37 per cent of its revenues from MTN Nigeria had its shares jump as much as 9.3 per cent, the biggest gain since May 2009, before paring gains to 121.43 rand at 1:27 p.m.
Shares in MTN had dropped to a low of Rand 109.56, from a 52-week best level of R245, with its current market cap at Rand 227 billion, down from a best of aRand 450 billion. The group has lost Rand 80 per share over the past year – or 40 per cent of its value.
The renewed hope of a settlement with NCC had prompted stock buyers to place their trust on the shares.
At the Federal High Court, Ikoyi, Lagos last Friday, MTN Nigeria sought an for an out-of-court settlement in a suit filed by it challenging the power of the NCC to fine it N1.04 trillion for alleged breach of subscriber registration rules.
Following the request by MTN, the Presiding Judge subsequently adjourned the matter till March 18, this year, when the two parties are expected to come back with their mutually-agreed decision on the matter.
MTN in a statement issued from its headquarters in South Africa said “The judge adjourned the matter to 18 March 2016 in order to enable the parties to try and settle the matter. If the parties are unable to reach a settlement the matter will then proceed on that date.”
MTN said “Shareholders are therefore advised to exercise caution when dealing in the Company’s securities until a further announcement is made.” NCC fined MTN ₦1.04 trillion in October 2015 for not disconnecting unregistered SIMs on its network.
After negotiations with Nigerian authorities, the fine was reduced by 25 per cent to ₦780-billion. MTN then opted to take the matter to court in Lagos, thereby missing a 31 December deadline imposed by the Nigerian governmen
