MTN Syria sale held up by legal intervention

MTN Syria sale held up by legal intervention

South African mobile operator MTN is reportedly hoping to do a deal worth US$65 million for its Syrian business. However, Reuters reports that this sale, amounting to 75% of MTN’s Syrian unit, may now be under threat.

In fact MTN Syria was recently placed under guardianship by a court in Damascus over alleged MTN violations of the terms of its licensing contract. The state claims these supposed violations deprived the government of revenue. MTN, however, has denied the allegations and said last week that it intended to appeal.

To complicate matters slightly, the court-appointed guardian is chairman of MTN Syria minority shareholder TeleInvest. TeleInvest was apparently expected to be the buyer of MTN Group’s 75 percent stake in MTN Syria.

The sale to TeleInvest is meant to be part of MTN Group’s plans to exit the Middle East in the medium term. As we reported in August, MTN Group plans to focus its strategy on its core African markets in the medium-term future.

In the six months to June 2020, MTN Syria is said to have accounted for 0.7%  of the MTN group’s core profit.

The appointed guardian will be responsible for managing day-to-day operations while the guardianship order remains in place, although there has been no indication of how long that might be.

Reuters explains that MTN’s operations in the Middle East have been marred by allegations that it used bribes to win a 15-year operating licence in Iran and that it aided militant groups in Afghanistan. MTN denies the allegations.