To comply with the terms of its freshly renewed operating licence, MTN Uganda must list a 20% stake on the country’s stock exchange within the next two years.
After two years of negotiations, MTN Uganda finally reached US$100 million agreement for a 12-year renewal of its operating licence. Its previous licence expired in October 2018, and since that point it had been providing services via a temporary licence that it renewed every six months.
TeleGeography reports that the Uganda Communications Commission (UCC) has also given MTN five years to achieve network coverage for a minimum of 90% of the country’s population.
MTN Uganda has not yet agreed to the requirement on the grounds that listing shares locally may not have the desired effect of increasing local ownership in the operator via stake holdings.
In January, CEO Wim Vanhelleputte argued that the government should drop the requirement and instead allow local investors to acquire stakes in overseas firms via private placements, subject to a vetting process.
Vanhelleputte noted that this would ensure that Ugandans were able to acquire holdings in foreign companies, whereas even if an initial public offer (IPO) imposed a local bidding requirement, overseas investors would still find ways to buy shares via the stock exchange.