South Africa’s bourse briefly suspended trading in the shares of the MTN Group on Monday, after the stock fell as much as eight per cent as Africa’s largest mobile telecoms operator battles to reduce a $5.2bn (N1.04tn) fine it faces in Nigeria.
The stock has fallen by more than 25 per cent in the past seven sessions, wiping in excess of 60 billion rand ($4.4bn) off its market value, after the Nigerian Communications Commission imposed the fine last week for its failure to cut off unregistered users, according to Reuters.
After trading resumed hours later, MTN shares were down by 5.9 per cent at 148.51 rand at 12:00 GMT. They earlier touched a three-year low of 142.50 rand.
One trader said the stock tumbled due to speculation that the company had agreed to pay the fine, which is equivalent to almost a quarter of Nigeria’s 2015 budget of $22bn, and would wipe out more than two years of MTN’s annual profits.
“There has been some speculation that the company has agreed to pay the fine, but we really want to hear it from the company itself,” said Afrifocus Securities portfolio manager, Ferdi Heyneke.
MTN said it was still in talks with the Nigerian authorities about the fine.
“The company reiterates that engagements with the Nigerian authorities are continuing,” MTN said in statement.
MTN has been in talks with the Nigerian presidency, internal security agency and the NCC to resolve the matter, according to a regulatory source.
The Chief Executive, MTN, Sifiso Dabengwa, flew to Abuja to make what sources familiar with the matter said was an attempt have the penalty reduced.
The NCC had on Friday gave MTN two weeks to pay the fine.
Meanwhile, there were indications on Monday that the beleaguered telecommunications operator would get a reprieve from the NCC in the next 48 hours.
This followed the intervention of the Presidency in the imposition of N1.04tn fine on the leading digital mobile operator in the country for failing to disconnect 5.1 million subscribers who had not been registered in accordance with the rules on SIM card registration in the country.
The commission imposed a fine of N200,000 for each unregistered subscriber or preregistered subscriber found on any telecommunications network operating in the country.
Vice President Yemi Osinbajo had presided over meetings in Abuja on Thursday and Friday, which was attended by Executive Vice Chairman of the NCC, Prof. Umar Danbatta, as well as top officials of MTN from Nigeria and South Africa.
Our correspondent learnt on Monday that the meetings were continuing and that MTN would likely get some reprieve to pay lesser than the original penalty imposed on it by the regulatory agency.
A source, who spoke on the condition of anonymity, said, “Yes, the Presidency has taken over the matter and within 48 hours, a resolution will be reached. The fine will not be waived but there will be some reduction.”
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