MTN IPO to close today

The MTN Initial Public Offering (IPO) is expected to close today, six weeks after one of Uganda’s most profitable companies floated a 20 per cent offer to the public.   
On October 11, MTN opened its 4.47 billion share sale to the public with a par value of Shs1 each at an offer price of Shs200 for sale.

The move followed a requirement of the law under the National Broadband Policy, which makes it mandatory for all telecoms to list on the Uganda Securities Exchange (USE). 
Al though the performance of the IPO is yet to be revealed, MTN at the weekend indicated that the number Securities Central Depository accounts had almost doubled to 60,000 by Friday, signalling significant activity during the last six weeks since the telecom floated its offer.  

On October 12, a report by USE indicated that the Exchange had recorded growth in Securities Central Depository accounts, increasing to 40,000.
This had been just a day after MTN opened its offer on October 11. A Securities Central Depository account facilitates an investor to buy and sell shares.  
Speaking during a media briefing in Kampala at the weekend, Mr Wim Vanhellepute, the MTN chief executive officer, said the number of Securities Central Depository accounts opened during the MTN IPO offer period had doubled, increasing by almost 50 percent from  30,000 accounts prior to the offer.  

MTN, which has in the last five years - to the period ended December 31, 2020 - maintained a profit band averaging at about Shs56.5b per annum, is expected to have massive impact on the USE, whose size, according to the Capital Market Authority, is expected to double from Shs4.2 trillion to about Shs8 trillion. 
During the briefing, Mr Vanhellepute also noted that the telecom had increased its daily limit - which defines how many shares one can apply for per day - from Shs5m to Shs20m. 
The offer period is expected to be closed today, after which allotment of shares will take place. 
The allotment will be followed by listing on the main investment market of the USE, which will partly fulfil the telecom’s license requirement of listing before June 2022. 
In July last year, government granted MTN a 10-year license after almost a year of temporary renewals. 

The telecom, as a license condition, was required pay $100m as well as list on the USE before June 2022. 
At the weekend, Mr Vanhelleputte said in line with its license requirement, MTN had committed to invest $3m (Shs10.7b) in the telecom sub-sector over the next three years. 
“We are committed to deliver the growth of the company so that potential investors and shareholders get their returns. To the members of the public who are interested in the offer, it is still valid November 22 [today] at 4pm,” he said.