A ray of light has been shed in the MTN versus the Nigerian Communications Commission debacle, as MTN’s shares rose to 9.2% ‘to close at R122.99’ last week Friday. This following the announcement that the parties are engaging in an out-of-court settlement.
“The judge adjourned the matter to 18 March 2016 in order to enable the parties to try and settle the matter. If the parties are unable to reach a settlement the matter will then proceed on that date,” stated MTN.
According to a Business Day report, the MTN group makes 37% of its revenue from the Nigerian market, with the current fine equating almost twice the amount of “annual average capital spending over the past five years.”
The fine has in the past been the result of share unit price drops and the CEO of the MTN Nigeria operation has also revealed that a fine of this magnitude could bankrupt MTN, as it makes a large amount of the company’s annual turnover.