In preparation for our Twitter Spaces tomorrow evening on the MTN Uganda [@mtnug] IPO, it's time do a thread on the #MTNIPO.
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1.
On Monday 11th October 2021, MTN Uganda announced the opening of its initial public offer of 20% of its ordinary shares
This was after approvals by the Capital Markets Authority of Uganda [@CmaUganda] and the Uganda Securities Exchange [@USEUganda]
2. What is on Offer?
4.47B shares (20% of ordinary shares) are on offer at a price of UGX 200 ($0.06) each valuing MTN Uganda at UGX 895.56B ($250m)
MTN Group currently holds 96% of MTN Uganda.
Offer is open to investors in Uganda, Kenya, Tanzania, Rwanda & Burundi.
3. Get to know the key players in the IPO including legal advisors, lead receiving and sponsoring brokers and reporting accountants:
4. Incentive in the event of an oversubscription:
The offer also comes with a rare incentive scheme signalling the issuer’s intent to ensure the offer is successful.
5. After IPO:
After the successful completion of the offer, MTN Uganda will list on the Main Investment Market segment of USE.
MTN Uganda will become the 10th domestic company listed on the USE.
There are 8 cross border listings from Kenya on USE.
6. About the company:
MTN Uganda [@mtnug] started operations in 1998 and is a leading telecoms company in Uganda
The main objective was to carry out the business of a national operator of a telecommunications network pursuant to the NTO licence granted by the UCC.
7. Ownership structure:
The company is a subsidiary of subsidiary of MTN Group [@MTNGroup] a mobile operator that has a presence in 20 markets in Africa and the Middle East.
Here is the current shareholding structure and the 2020 financial highlights of the MTN Group
8. Products:
@mtnug offers network services, digital & financial technology services, interconnect & roaming, sale of mobile devices & MTN Mobile Money (conducted through subsidiary MTN Mobile Money Uganda Limited).
You compare its revenue mix with that of @SafaricomPLC here:
9. Coverage:
MTN Uganda has presence in all 134 districts of Uganda delivering services through a network of 119,077 mobile money agents, 200 service stores and 13 main distributors.
10. Subscribers and market share:
In the first half of 2021, it had 14.9 million subscribers, 8.6 million mobile money users and 4.7 million active data users.
11. Current shareholding before offer and how it has changed over the last 5 years.
Remember MTN Group is the selling company.
12. A quick look at the financials:
- Revenues have grown at a CAGR of 9.5% from UGX from UGX 1.31T in 2016 to UGX 1.88T in 2020
- Revenues driven by voice as the country’s mobile penetration continues to increase.
9 b on coverage including 4G
13. Financials continued:
- EBITDA margins of ~50% in FY 2020.
- Capex intensity of 13% in FY 2020
- 18.7% CAGR growth in Free-cashflows over FY 2016 to FY 2020
14. Financials continued: Current capital structure
15. Dividend payout policy:
- Targets a 60% dividend payout ratio
- Pays out dividend 3 times a year (H1, Q3 & Q4)
- New shareholders to get any final dividend declared
- Financial year ends in December btw
—The Transmission Master Plan (TMP) projects the need for an additional 9,600 km of transmission lines and a $5.2B investment by 2042 to support industrial growth and electrification.
—KETRACO is exploring Public-Private Partnerships to bridge the funding gap
2. Why PPPs?
—KETRACO projects have historically been financed through loans from development partners like the World Bank, AfDB, JICA, and Exim banks.
—The next set of funding from these partners is estimated to be available after the financial year 2028/2029.
—Total Assets: +17.7% to 3.5B
—Net Income: +8.5% to 235M
—PAT: +3.8% to 116M
—Dividend rate on deposits: 20%
—Interest rate on member deposits: 11%
2. Magereza DT Sacco:
—Total Assets: +12.7% to 7.9B
—Net Income: +33.4% to 606M
—PAT: +53.9% to 129M
—Dividend rate on share capital: 10%
—Interest rate on member deposits: 6%
10 Key Takeaways from the CBK Post-MPC Briefing by the Governor.
1. CBK is keen on the separation of Safaricom & M-Pesa:
"One of the factors that has been delaying this..is the tax liability which is fairly significant in the order of at least KES 75B & what to do with it"
2. There has been a sharp rise in remittances to Kenya this year:
"If one were to compare the first two months of 2024 (Jan & Feb 2024), we see remittances for those two months compared to the two months in 2023 have increased by more than 20%"
3. There was a slowdown in growth in credit to the private sector in Feb 2024 from 13.8% to 10.3%
"A certain amount of private sector loans is denominated in dollars & therefore, when the exchange rate appreciated the level of credit to the private sector did decline"
We selected the top #MwangoMemes from 2023 for you to enjoy!
1. The Kenya shilling closed 2023 at KES ~157 against the dollar.
Earlier in the year the President had promised that it would be trading at around 115 to 120 in a few months.
#MwangoMemes
@coldtusker @OchiengJasper @Brianmbunde @Bebi_16 @swabrah @KenyansNoContxt @Dicksonmagecha @MugambiNandi @alexmwanzo @InvAnalystKe 2. Kenya Power [ @KenyaPower] sought to enter the internet business.
It identified some 93 hotspots in Nairobi & Mombasa where it will connect with high-speed internet through 1,331.68 km of overhead fiber optic cables in phase 1 of its data business.
#MwangoMemes
3. There was a proposal to make Kenyans working abroad make mandatory contributions to a new Fund.
Every migrant worker would have to register as a member of the fund before departing the country.
1. Kenya's backlog of incomplete projects reaches KES 1.3 T, sparking calls for a halt on new government projects until existing ones are completed
#MwangoMemes
@MihrThakar @KenyansNoContxt @PesaWall @alexmwanzo @swabrah @NguliMT @MwangiMaina_ @Brianmbunde @arnoldi254 @DollyOgutu 2. Taxpayers are facing a new burden as President Ruto's administration plans to secure an additional KES 362B to fund his second full-year budget, set to surpass the KES 4T mark for the first time.
More debt on the way:
#MwangoMemes
3. Emergency loans the Treasury has tapped directly from CBK [ @CBKKenya] have hit a historical record KES 91.13 B.
According to CBK data, GoK’s overdraft has grown from KES 61.12 B at the end of July to KES 88.33B on December 1.
#MwangoMemes