MTN to price $2 billion Ghana IPO next week

Africa’s telecommunication giant MTN is said to start selling about a third of its Ghanaian unit worth $754 million representing 35 percent of the $2 billion next week in an initial public offering.

This will be 10 times larger than the West African nations previous biggest-ever share sale, according to a Bloomberg report.

Based on the report, the offer to raise 3.48 billion Ghanaian Cedis of stocks will start May 29th and close at the end of July. MTN will be offering 4.64 billion shares in the unit at 75 pesewas each, representing 35 percent of its value MTN Nigeria is potentially worth between $8.6 billionand $10.3 billion, according to a research done by BusinessDay.

Applying a 7 multiple or the Ghana implied EV – EBITDA valuation to MTN Nigeria’s EBITDA for trailing 4 quarters of N365 billion gives a value of N2.55 trillion or around $7 billion.

MTN said May 3 the offer will start at the end of the month. The Johannesburg-based company is listing the stake on the Ghana Stock Exchange to meet conditions agreed to with the government in 2015, when it acquired the right to use fourth generation spectrum, a high-speed mobile data carrier for customers.

MTN declined to comment. Kwabena Osei-Boateng, managing director of IC Securities, which is arranging the placement, told Bloomberg by phone he couldn’t immediately comment.

If successful, the share sale will compare with the Ghana Stock Exchange’s previous biggest IPO, when Agricultural Development Bank Ltd. raised 326 million cedis in December 2016.