MTN completes ATC divestments; raises ZAR8.9bn to help trim debt

23 Mar 2020

South Africa-incorporated regional carrier MTN Group has announced the completion of the sale of its stake in ATC Uganda for ZAR2.2 billion (USD125.2 million), while also confirming that it has received regulatory approval for the divestment of its shares in ATC Ghana. It notes it is due to receive further transaction proceeds of approximately ZAR6.7 billion in the process, taking the total proceeds received for the disposal of both ATC Uganda and ATC Ghana to ZAR8.9 billion, which it says will be used to pay down US-dollar debt and general corporate purposes.

In April 2019 MTN Group introduced its asset realisation programme (ARP), which aims to reduce debt, simplify its portfolio, reduce risk and improve returns. Upon completion of the ATC sales, it will already have realised ZAR15.0 billion in year one of the ARP, prompting it to increase its target to a minimum ZAR25 billion in further asset realisations over the medium-term (three to five years), and a holding company leverage target ratio of below 2.0 times. It notes: ‘MTN has strengthened its operational and financial position and is well-placed to weather the prevailing turbulent macroeconomic environment. The Group remains focused on its strategic execution and committed to its clearly-defined and disciplined capital allocation framework.’

Earlier this month, MTN Group reported that net profit for the year ended 31 December 2019 rose 2.8% year-on-year to ZAR8.96 billion from ZAR8.72 billion in 2018, as group revenue for the year climbed to ZAR151.46 billion from ZAR134.56 billion, which helped to drive an increase in the margin on EBITDA (up to 42.3% from 35.9% previously) and reduce ‘CAPEX intensity’. MTN’s consolidated reported capital expenditure in 2019 reached ZAR26.28 billion, but it plans to increase CAPEX by 13% to ZAR28.50 billion in 2020 to continue investing in its networks, it said.

South Africa, MTN Group