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MTN Uganda succeeds in second sale of shares

MTN Uganda CEO Sylvia Mulinge

MTN Uganda CEO Sylvia Mulinge

MTN Uganda is now fully compliant with the minimum public float requirement by law in Uganda after it completed the sale of the last batch of its 20 per cent shares to the public.

In 2021, MTN offered 20 per cent of its shares in an initial public offer before finally listing on the Uganda Securities Exchange. However, the public only bought 12.97 per cent of the shares. However, the telecom company provided an undertaking to the USE that the remaining 7.03 per cent would be completed by December 5, 2024.

To attain the remaining percentage, the company undertook a secondary market offer for the purchase of shares, which ran from May 27, 2024 to June 10, 2024. The shares were sold at a market price of Shs 170 each with a minimum purchase requirement of 1,400 shares amounting to approximately Shs 238,000.

During the announcement of results from this secondary market offer at the MTN headquarters in Kampala, USE chief executive officer Paul Bwiso revealed that they gave approval and the company was voluntarily suspended for two weeks from USE in order to give Ugandans an opportunity to participate, look at the fundamentals of the company, the incentivized shares that were provided, and the dividends that were part of this offering.

“MTN Uganda’s market capitalisation is Shs 3.8 trillion out of the total local market capitalisation of Shs 11.8 trillion. That gives MTN a 32.3 per cent contribution to the local market capitalisation and this growth has been signified in the turnover we have seen at the exchange from the IPO,” he said.

Grace Semakula, the chief executive of SBG Securities, the securities arm of Stanbic bank, the lead sponsoring broker for MTN Uganda’s offer, noted that in total, 157,4807,373 shares were offered to the market and the preliminary results indicate a subscription rate of 230 per cent, making it the strongest subscription they have received from issuance in the local market. This performance translates into an over subscription of 130 per cent.

“We have received several applications from both existing and new investors and the company’s shareholder base has grown to over 20,000. With a strong retail participation in this offer, we have seen an average retail participation of Shs 13.4 million invested per average retail applicant,” said Semakula.

MTN Uganda chairman Charles Mbire confirmed the success of the secondary offer, which, he said, resulted into approximately 19,600 Ugandan investors owning a stake in the company.

“We are proud to have helped facilitate the broadest possible shareholder base in Uganda, with regional participation, further developing the equity capital markets in this country.”

Meanwhile, MTN Uganda CEO Sylvia Mulinge revealed that the company’s old investors on the register as per June 12, 2024 and the new investors who participated in the secondary offer are eligible for the next dividend payment worth Shs 143 billion, translating to Shs 6.4 per share which will be paid by June 25, 2024.

This will bring the total dividend the company has paid to its shareholders since the IPO in December 2021 to Shs 864 billion.

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