Africa-Press – Namibia. THE general public can expect soon to be listed Mobile Telecommunications Company (MTC) shares to be more affordable after the company split its shares in a 1:30 ratio.
This split was revealed by the company’s chief financial officer, Thinus Smit, last Friday, who said it would ensure affordability. This split has now led to MTC’s initial 25 million shares to be subdivided, into small rations, but at a cheaper price – and now the company has an issued share capital of 750 million shares.
Of this 750 million shares, the state will get rid of 367 million shares, representing 49%, which is expected to rake in between N$3 and N$3,5 billion. A basic calculation based on the above will have MTC shares priced between N$8,16 and N$9,52 each.
Share splits are common, and involve the company dividing the number of shares it has issued into small but cheap rations, which causes its market price of individual shares to drop.
Without the split, MTC would have only over 12 million shares on offer, and keeping the expected inflow constant, one share would have cost anything between N$244,90 and N$285,71.
MTC’s board chairperson Theo Mberirua said the split has made more shares available for investors and interested Namibians. Mberirua added that the company will embark on a public awareness campaign detailing how to go about acquiring shares, starting today.
In the event that the public offer is oversubscribed, MTC has said the order of the allocation process will go first to previously disadvantaged Namibians, then to MTC staff and customers, followed by Namibian natural persons and corporates, and finally to Namibian institutions, Southern African Development Community (SADC) and international investors.
Approval to list has been granted by the Namibian Stock Exchange (NSX) and the prospectus is expected to be released in the coming weeks. The listing of MTC’s 49% share is the largest proposed listing by a Namibian company since the establishment of the NSX and will have Namibia Post and Telecommunications Holdings Limited (NPTH) retaining a 51% share.
NPTH is a 100% state-owned company which holds the majority of the market share in the country’s telecommunications industry through MTC and Telecom Namibia. According to the public enterprises minister, Leon Jooste, there were three main reasons why the government decided to list MTC.
The first is to develop Namibia’s financial sector by putting to use Namibia’s billion dollar savings pool. This year, The Namibian reported that the only way to push funds out of the savings pool and into real working investments was through listed companies.
Although this statement did not sit well with many, the minister’s words now squarely affirm this. The other objective, according to Jooste, was for the listing to provide liquidity for the country’s coffers that are constantly being filled with debt.
The N$3 to N$3,5 billion inflow is expected to improve the government’s ability to rebuild its debt profile. The last objective Jooste stated was that MTC’s listing would broaden economic participation through ownership by ordinary Namibians in a profitable public entity.
MTC is expected to be listed before the end of November 2021, with a minimum number of shares available for investors. Jooste said there are no plans at this stage for the state to further reduce shareholding listing of 49% but said this listing would now compel MTC to create a new mindset.
MTC’s only competition after listing in a local context would be Paratus Namibia Holdings, whose shares closed off last week at N$12 a share.
