MTN share price hammered over fine worries

MTN logo. (Duncan Alfreds, Fin24)
MTN logo. (Duncan Alfreds, Fin24)

Cape Town – MTN's share price continued its downward trend on Tuesday as news emerged that the Nigerian authorities would not reduce the $5.2bn fine.

The Nigerian Communications Commission (NCC) slapped the hefty fine on Africa's biggest mobile operator after MTN failed to register 5.1 million SIM cards. The NCC however cut MTN some slack by extending the November 16 deadline for payment to an undisclosed date. The $5.2bn (over R74bn) fine is based on a charge of 200 000 naira ($1 005) for each unregistered customer.

According to data from INET BFA, MTN's share price dropped as much as 9.5% and traded in a broad range of between  R132.01 - R143.75 in brisk trading as worries about the operator’s ability to pay the sanction rattled investors.

The share price has since clawed back gains and by 11:32 on the JSE the shares were changing hands at R141.78 (-1.95%).

MTN said on Monday its newly appointed executive chairperson Phuthuma Nhleko had personally met with the Nigerian authorities to continue the ongoing discussions with them regarding the fine.

"The discussions include matters of non-compliance and the remedial measures that may have to be adopted to address this.”

Nhleko took over the reins at MTN last week after CEO Sifiso Dabengwa quit amid the Nigerian debacle.

The NCC has committed that the fine deadline will be extended while negotiations are ongoing.

MTN’s share price has declined by 32.85% in the last year.

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