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MTN shares hit 7-year low after N1.04trn fine

MTN shares hit 7-year low after N1.04trn fine
October 28
19:22 2015

MTN Group, one of the largest telecommunications company in Africa, has experienced a further decline in its shares, which have now hit the biggest three-day drop in seven years.

MTN’s shares plunged about 19 percent this week in Johannesburg, leaving the company valued at about $21 billion (288 billion rand), which represents a loss of about $2 billion worth in less than 72 hours.

The Nigerian Communications Commission (NCC) slammed MTN Nigeria with a fine of N1.04tr ($5.2bn), following its defiance of SIM registration regulations.

Immediately the fine was handed down, the company experienced over 12 percent decline in its shares for the first time in 17 years on the Johannesburg Stock Exchange (JSE).

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The decline continued on Tuesday, as MTN shares lost more value, falling by another four percent. They fell again by 2.6 percent to 155.85 rand at the close of business on Wednesday – the lowest since October 2012.

The fine is based on N200,000 ($1,004) for each of the N5.1 million subscribers MTN Nigeria failed  to disconnect – a penalty an analyst says the company cannot pay.

MTN Nigeria is the biggest telco in the Nigerian market, with about 62 million customers at the end of September.

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According to Bloomberg, MTN is planning to review its senior management in Nigeria, following the massive fine, which is believed to be higher than the company’s annual Nigeria profit.

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