Uganda gives MTN 2-year ultimatum to divest 20% of Shares on local bourse
The Uganda government has asked the local unit of South Africa’s MTN to list 20 percent of its shares on the local stock exchange within two years or risk losing its operational permits.
According to the Uganda Communications Commission, the local unit of MTN to initiate an Initial Public Offering (IPO) of not less than 20 percent of its equity as part of the conditions for the renewal of the permit for 12 years effective from July 1.
The telecoms currently operate on temporary permits after its initial 20 years licence issued in 2008 expired and due for renewal.
The unit of South Africa’s MTN is Uganda’s biggest wireless carrier and has been operating on temporary permits since its initial 20-year license expired in October 2018. It will pay $100 million for the fresh license.
Uganda Communications Commission spokesman Ibrahim Bbossa said an initial public offering was one of the conditions for the renewal of the permit for 12 years effective July 1.
Ugandan locals holding in the telecommunications firm was a paltry 4 percent as of last year and the government want to force the company to increase local investor’s stake in the firm.
The company is also required to extend its network and services to cover at least 90 percent of the country within five years, the regulator said in a statement on Friday.