MTN Uganda is making its Initial Public Offer (IPO) at the Kampala stock exchange with plans to sell a fifth of its stake to East African investors, Kenyans included.
The South African MTN subsidiary, which was due for renewal of its licence, said it had obtained regulatory approval to list 20 percent of its stake at the Kampala Bourse.
MTN said it would release a prospectus containing details of the offer on October 11. However, Uganda’s Capital Markets Authority (CMA) Keith Kalyegira said the IPO is expected to raise about Sh132 billion ($1.2 billion).
“The intention to float announcement is a major step towards delivering on our plan to list on the USE,” MTN Uganda chairman Charles Mbire told reporters.
The Ugandan regulators added that the sale was exclusive to citizens of the East African Community trading bloc, including Kenya, Tanzania, Rwanda, Burundi and South Sudan
“This will potentially be the largest IPO on the Ugandan market and will be delivered primarily through a digital paperless/ green platform which is the first of its kind in East Africa,” said MTN Uganda in a statement.
“The offer and listing of MTN Uganda is in line with MTN Group’s localisation plans to drive local ownership in the markets within which MTN operates,” the firm said.
Last year, the Ugandan government set specific conditions for renewal of licences for Telecoms, among them listing on the local stock exchange to allow citizens get a stake of big companies.
MTN Uganda renewed its licence last year after paying Sh11 billion, with plans to list on the Kampala Bourse.
“We are delighted to witness the honouring of this commitment by MTN,” Executive Director of the Uganda Communications Commission, said Irene Kaggwa-Sewankambo said.
The Telcos are then given a two year period within which they should fulfill the set conditions.
“This IPO gives Ugandans an opportunity to own a piece of the company,” said USE chief executive Paul Bwiso on Tuesday.
MTN Uganda started operating in the country in 1998 and has amassed about 15 million subscribers.