MTN's unsold share sale offer oversubscribed 

MTN remains a blue-chip company at the Uganda Securities Exchange. Photo / File 

What you need to know:

  • A notice indicates that the MTN secondary offer was oversubscribed by at least 1.42 billion share applications 

The MTN secondary market offer has been oversubscribed by at least 52.4 percent, according to a notice published Thursday. 

The notice, which announced results after the completion of the purchase of unsold shares in MTN Uganda indicates that the secondary offer was oversubscribed by at least 1.42 billion share applications, an equivalent of 52.4 percent. 

On June 3, MTN made 1.57 billion residual shares available in a secondary sale in fulfillment of regulatory obligations that required the telecom to sell unsold shares from its Initial Public Offering (IPO) within three years of listing on the Uganda Securities Exchange (USE).

However, the offer returned an application of more than three billion (3 billion) shares, a boost to the telecom, whose IPO returned an undersubscription. 

The 1.57 billion shares represented 7.03 percent of the 20 percent offer that MTN had floated during the IPO in August 2021. 

MTN had also suspended trading in its shares at the Uganda Securities Exchange to allow the sale of unsold shares held by its parent company, MTN International. 

MTN was listed on the Uganda Securities Exchange in November 2021 after completing the allotment of shares from the IPO, in which it had floated 4.5 billion shares as part of a licence requirement. 

The National Broadband Policy makes it mandatory for MTN and other telecoms to open up part of their shareholding to Ugandans.

The IPO in November 2021 was undersubscribed, returning 2.9 billion sold shares out of the available 4.5 billion. 

It was the first time an IPO had been undersubscribed in the history of the USE since it was established in 1997.  

However, the offer had mobilised the largest amount of capital in the history of USE, realising Shs532b. 

The Thursday notice also indicated that MTN had lifted the voluntary suspension of trading in its shares at the USE effective June 13, noting that the headline performance of the offer had made available at 1.57 billion, against an application of three billion shares. 

The telecom also indicated that details of the results of the offer would be available on or before June 20, 2024. 

The new offer, which had largely been incentivised to attract investor participation had come at a time when equity investors have faced a decline in their returns. 

Telecoms remain some of the blue-chip companies listed on the Uganda Securities Exchange. 

Last year, Airtel also conducted an IPO that saw its parent firm Airtel Africa reduce its stake to 89.11 percent from 100 percent.

Airtel Africa, which sold shares at a price of Shs100 each, is also expected to make a secondary offer, in which it will sell at least 9.11 percent of unsold shares from its IPO.

Both MTN and Airtel have high-profit margins amid significant revenue growth, a move that has seen them pay generous dividends.