MTN Group has admitted that efforts to repatriate $237.15 million (about 200 million euros) from its Iranian unit, MTN Irancell, will become tougher after U.S. President Donald Trump on Tuesday announced his country’s decision to withdraw from the Iran nuclear deal, and reinstated economic sanctions on the Islamic republic and companies doing business in the country.
According to an email sent to THISDAY on Wednesday that the U.S. imposed sanctions on Iran and companies doing business in the country would not impact its reported earnings for 2018, nor will it affect its planned IPOs in Nigeria and Ghana.
Africa’s biggest wireless carrier had more than $1 billion stuck in Iran due to U.S.-led sanctions that ended following a landmark agreement in 2015.
Since that accord, the Johannesburg-based telecoms company has been steadily withdrawing the funds.
However, there were fears that Trump’s announcement on Tuesday would again limit MTN’s capacity to repatriate loans and dividends from Iran, its second biggest market with 43 million subscribers after Nigeria. It has operated in the country since 2005.
Addressing the issue Wednesday, MTN said it remained committed to its investment in Irancell and to repatriating the balance of legacy cash in Iran while remaining compliant with appropriate legislation.
According to a statement sent to THISDAY by MTN from Johannesburg, “On 8 May 2018 the U.S. announced its decision to withdraw from the Joint Comprehensive Plan of Action (JCPOA) agreement and to re-impose economic sanctions against Iran.
“These sanctions may limit the ability of MTN Group to repatriate cash, both dividends and loans, from MTN Irancell. We will continue to monitor the situation including the response of the Iranian authorities and the other JCPOA members.
“During 2018 MTN Group has repatriated approximately €88 million from MTN Irancell including €61 million relating to the full 2017 dividend due to MTN as well as a further €27 million of historic dividends. The remaining balance due to MTN is approximately IRR10,000bn (approximately €200 million).”
MTN shares fell as much as four per cent Wednesday on the JSE, the most in more than a month, on concerns that cash would be stuck in Iran. The shares recovered to trade 2.7 per cent lower at 121.55 rand as of 9.48 a.m. in Johannesburg, according to Bloomberg.
In response to enquiries, the mobile network operator also allayed concerns that the reinstated sanctions would affect its reported earnings for the year.
It also said the sanctions would not affect its planned IPOs in Nigeria and Ghana.
MTN had agreed to list its local subsidiary on the Nigerian bourse after a deal was struck with the federal government on the reduction of a $5 billion fine imposed on the company in 2015 after it failed to disconnect 5 million unregistered SIMs on its network.
