Thursday, August 6,2020
MTN Group has disclosed that in line with plans to focus on its African operations, it will be exiting the Middle East markets over the medium term, starting with the sale of its 75 per cent stake in MTN Syria.
On Thursday, the Group President and Chief Executive Officer (CEO), Mr Rob Shuter, during the presentation of its half-year result, said MTN was in advanced discussions to sell the stake in MTN Syria to TeleInvest, which is the minority shareholder in MTN Syria with a 25 per cent holding.
“As part of the review of our portfolio, we believe the group is best served to focus on its pan-African strategy and to simplify its portfolio by exiting the Middle East region in an orderly manner,” Mr Shuter said.
The Middle East assets, which also include operations in Afghanistan and Yemen, contributed less than 4 per cent to group earnings before interest, taxes, depreciation, and amortization in the first six months of the year.
MTN’s entry into the region has been marred by allegations, which it has denied, that it used bribes to win a 15-year operating licence in Iran and also that it aided militant groups in Afghanistan.
Sanctions from the United States have made it harder to repatriate cash from its Iran joint venture, while prolonged wars and geopolitical challenges have also not made it easier to operate there.
With this, Mr Shuter said the focus now will be on exiting its operations in Syria, Afghanistan and Yemen, and said the group plans to divest its 49 per cent minority holding in Irancell.
The African telecommunications market offers a stronghold for the market where service revenue rose 9.4 per cent buoyed by strong demand for data and financial services in Ghana, Nigeria and South Africa during the coronavirus lockdown.
Overall data traffic also increased by 91.5 per cent year-on-year.
The COVID-19 pandemic and instability in global oil prices have brought about extraordinary macroeconomic uncertainty and major volatility in financial markets that has impacted MTN’s ability to continue with plans to reduce debt, simplify the portfolio, reduce risk, improve returns and realise capital over three to five years.