Africa’s foremost telecommunications firm MTN realized a total of R14 billion ($982 million) in assets sales through its Asset Realization Programme (ARP) in 2019.
The ARP was launched in March 2019 with an aim to simplify the company’s portfolio, reduce debt and risk, and also improve the group’s general returns. MTN is reviewing a raft of investments under the three-year, R15 billion divestment program with a heightened focus on high-growth markets in the Middle East and Africa.
MTN Group President and CEO, Rob Shuter, said in a statement that the telecom group “will have realized proceeds of approximately R14 billion within the first 12 months of this program.” He further said that “realizing proceeds from simplifying the group remains a major strategic objective and we expect further progress in this program in 2020.”
The R14 billion accumulated proceeds from MTN asset sales in 2019 involves the group’s disposal of its stakes in ATC Ghana to American Tower Corp for R900 million likewise its investment fund in Amadeus and Travelstart for R1.2 billion making a total of R2.1 billion ($140 million) earlier that year.
On October 31, 2019, MTN released its quarterly update where it has just agreed to dispose of its 49 percent equity holdings in Ghana Tower Interco B.V. (‘Ghana Interco’) and Uganda Tower Interco B.V. (‘Uganda Interco’) to AT Sher Netherlands Cooperatief U.A. (ATC) for $523 million, approximately R7.3 billion.
The transaction is expected to close in the first quarter of 2020 upon which MTN will record a profit on disposal of approximately R6 billion.
As part of the Asset Realization Programme, MTN Nigeria completed the redemption of its preference shares which is a necessary part of the simplification of its capital structure. The MTN Group received $315 million (R4.4 billion) from this sale on 31 December 2019.
Following the completion of these transactions, MTN has been able to realize approximately R14 billion within the first 12 months of its guided three-year ARP plan. With this program still in place, MTN intends to use the proceeds to pay down its various debts and also for the reconstruction of its telecommunication network.
