MTN offers $1.5bn to settle fine imposed by Nigeria
by Camillus Eboh,
2016-03-11 12:25:59.0
ABUJA — MTN Group has offered $1.5bn to settle a much larger fine from Nigerian regulators for missing a deadline to disconnect unregistered SIM card users, a document shows.
Africa’s biggest mobile phone group has been in talks with Nigerian authorities to have the $3.9bn penalty reduced and last month made a "good faith" payment of $250m towards a settlement.
In a letter to the Nigerian government from MTN’s lawyer, former US attorney-general Eric Holder, the company proposed a 300-billion naira ($1.5bn) settlement to be paid through a combination of government bond purchases, cash instalments and network access to the Nigerian government.
Mr Holder said in the letter, dated February 24, the offer "ultimately is in the best interest of the FGN (Federal Government of Nigeria) and MTN Nigeria."
MTN said on Friday talks with the Nigerian government were ongoing.
"MTN has previously advised shareholders not to make decisions based on press reports, and MTN again urges its shareholders to refrain from doing so," it said.
Nigeria’s telecoms ministry had no immediate comment.
In its annual results last week, MTN said it had put aside $600m to cover a deal over the fine, which was originally set at $5.2bn on the basis of charging $1,000 for every unregistered SIM card.
Nigeria imposed a deadline on mobile operators to cut off unregistered SIM cards, which MTN missed, amid fears the lines were being used by criminal gangs, including militant Islamist group Boko Haram.
The fine, equating to more than twice MTN’s annual average capital expenditure over the past five years, came months after Nigerian President Muhammadu Buhari swept to power after an election campaign that pledged tougher regulation and a fight against corruption.
Shares in MTN, which makes about 37% of its sales in Nigeria, were little changed at R147.53 at 8.39am GMT, after rising more than 2% shortly after the market opened.
Reuters
MTN's head office in Johannesburg. Picture: EPA/KIM LUDBROOK
ABUJA — MTN Group has offered $1.5bn to settle a much larger fine from Nigerian regulators for missing a deadline to disconnect unregistered SIM card users, a document shows.
Africa’s biggest mobile phone group has been in talks with Nigerian authorities to have the $3.9bn penalty reduced and last month made a "good faith" payment of $250m towards a settlement.
In a letter to the Nigerian government from MTN’s lawyer, former US attorney-general Eric Holder, the company proposed a 300-billion naira ($1.5bn) settlement to be paid through a combination of government bond purchases, cash instalments and network access to the Nigerian government.
Mr Holder said in the letter, dated February 24, the offer "ultimately is in the best interest of the FGN (Federal Government of Nigeria) and MTN Nigeria."
MTN said on Friday talks with the Nigerian government were ongoing.
"MTN has previously advised shareholders not to make decisions based on press reports, and MTN again urges its shareholders to refrain from doing so," it said.
Nigeria’s telecoms ministry had no immediate comment.
In its annual results last week, MTN said it had put aside $600m to cover a deal over the fine, which was originally set at $5.2bn on the basis of charging $1,000 for every unregistered SIM card.
Nigeria imposed a deadline on mobile operators to cut off unregistered SIM cards, which MTN missed, amid fears the lines were being used by criminal gangs, including militant Islamist group Boko Haram.
The fine, equating to more than twice MTN’s annual average capital expenditure over the past five years, came months after Nigerian President Muhammadu Buhari swept to power after an election campaign that pledged tougher regulation and a fight against corruption.
Shares in MTN, which makes about 37% of its sales in Nigeria, were little changed at R147.53 at 8.39am GMT, after rising more than 2% shortly after the market opened.
Reuters
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