MTN Uganda’s 7% IPO registers 230% subscription rate

MTN Uganda on Thursday, June 13, 2024, announced the successful completion of its secondary market share offer, which registered a 230% subscription rate.

The secondary market offer for purchase of shares that was conducted between 27 May 2024 and 10 June 2024 was giving about 7.03% (1,574,807,373 ordinary shares) stake into the telecom company to the Ugandan public in line with the government directive through the Uganda Communications Commission. This was to supplement the public float of 12.97% in 2021.

SBG Securities Uganda Limited, a subsidiary of Stanbic Uganda Holdings Limited, was the lead broker.

Speaking at the function to announce the closure in Kampala on Thursday, Grace Semakula, the CEO of SBG Securities Uganda, said that the overwhelming applications were received from both existing and new investors.

“This offer boosted the local shareholder base to over 20,000 with an incredible subscription rate of 230%,” he said.

Paul Bwiso, the CEO of Uganda Securities Exchange, said the oversubscription reflect strong investor confidence in the Ugandan market.

“We’re happy to announce MTN’s achievement of the 20% public float requirement. With the 7.03% allocation, we anticipate increased liquidity and participation on the bourse. The remarkable 230% subscription rate and 130% oversubscription reflect strong investor confidence in the Ugandan market. We’re proud to partner with MTN and the investment community in supporting growth in our market,” he said.

Charles Mbire, the MTN Board chairman, welcomed the news that the offer has been oversubscribed.

“As with the initial public offer, the recently concluded secondary offer has been entirely successful. In addition to being oversubscribed, the offer has resulted into approximately 19,600 Ugandan investors owning a stake in the company. We are proud to have helped facilitate the broadest possible shareholder base in Uganda, with regional participation and in so doing, further developing the equity capital markets in this country,” Mr Mbire said.

“The process of allocation and settlement is still ongoing and over the course of next week, MTN Uganda will be in a position to confirm whether the company has achieved the minimum 20% public listing obligation as required by the Uganda Securities Exchange and the Uganda Communications Commission,” he added.

MTN Uganda CEO Sylvia Mulinge said the completion of the public listing is a milestone.

“The fulfilment of this commitment is aligned with MTN Group’s shared value philosophy to increase local ownership and participation in its businesses across the markets in which the Group is active,” she said.

“MTN Uganda Limited has paid a consistent dividend to shareholders, a feat we a proud of. Our old investors on the register as per yesterday, 12’h June 2024 and our new investors who participated in the offer are eligible for our 7th dividend payment worth UGX 143 billion, translating to UGX 6.4 per share which will be paid by 25th June 2024,” Ms Mulinge added.