MTN group sells Botswana unit in US$1.1bn fundraising drive

SOUTH AFRICA – MTN Group Limited, South African Headquartered wireless carrier, has agreed to sell its 53% stake in Botswana’s Mascom to Econet Global Ltd. for US$300 million as part of strategy in raising $1.1 billion, reports Bloomberg.

MTN also sold its Cyprus unit for US$294 million last year as a strategic disposal plan aimed at improving the company’s balance sheet with other businesses on the list.

The mobile company said its investments in tower companies and e-commerce platforms, such as African online retailer Jumia, were valued at 40 billion rand (US$2.79 billion) and would also be sold as they were not long-term strategic assets.

“The group has committed to the portfolio review realising more than 15 billion rand (US$1.05 million) over the next three years, excluding any proceeds from its 23 billion rand  (US$1.61 billion) position in IHS,” the company said.

In 2018, Chief Executive Officer Rob Shuter announced a review of MTN’s then-22 markets across the Middle East and Africa to evaluate ways of simplifying the business and focus on the highest-earning countries.

South Africa, Nigeria, Iran, Ghana and Uganda account for more than 84% of earnings, while some of the others, such as South Sudan and Syria, have been ravaged by conflict.

“We are simplifying the group, we are reducing risk, and improving returns. That will generate some returns that will be helpful for our gearing and other priorities,” Shuter said during an interview with Bloomberg.

The mobile-phone company is still facing a number of challenges across its territories, with a Nigeria court hearing into an alleged unpaid tax bill of about $2 billion due later this month.

However, in its bid to increase its footprint in Nigeria, the company has joined other Original Equipment Manufacturers (OEM) through the launch a smart feature phone in a bid to deepen Internet penetration in the country.

In addition, the mobile giant has also signed a business innovation deal with Huawei covering data services, enterprise, mobile financial services, rich media and wholesale.

MTN’s chief operating officer, Jens Schulte said that this is part of the company’s commitment in eliminating the digital demarcation in it emerging markets.