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MTC LISTING…INSTITUTIONAL INVESTORS WANT 77%

PHOTO: CONTRIBUTED

By: Nghiinomenwa Erastus

Selected Namibian institutional investors pre-committed to take up 282,899,160 (77%) of MTC shares made available.

This is according of the analysis provided by Simonis Storm and Cirrus Securities this week.

Collectively, the institutional investors are willing to invest N$2,4 billion in MTC.

If institutional investors’ applications get approved, only 84,7 million shares will be available for retail/individuals investors and others.

The remaining are worth N$720 million, which will now be contested by the public.

MTC has issued 750 million ordinary shares on the NSX shares with a total market capitalisation of N$6,4 billion.

However, the portion up for grabs is a maximum public offer of 367,5 million shares available for investment by individuals and companies.

The shares will be listed on the secondary market, NSX, with effect from the start of trading on 19 November 2021.

The government aims to raise N$3,1 billion by relinquishing its 49% ownership in MTC through Namibia Post and Telecommunications Holdings Limited

According to the prospectus, released on Tuesday, a share will go for N$8,50 and the minimum one can buy is 200 shares.

This is to say one needs a minimum of N$1 700 to qualify to be a potential investor through the application.

Moreover, it is indicated that for those who want to buy more, they can only do so in the 100s.

If one wants to add more to the minimum 200 shares, they can only add 100 or in a multiple of 100.

A minimum of N$1 700 is required but for those who need more, you will need to have $850 for every extra 100 shares

The application window started on Tuesday 09h00 to 1 November 2021 (12h00)

Since 2016, MTC’s annual profit after tax in 2016, N$579,4 million, has been above between N$700 million and N$800 million.

However, it is projected to fall to around N$600 million by the end of this year, before it recovers next year to around N$720 million, according to the prospectus’ projection.

Notable to potential investors is that MTC has a strong dividend pay-out profile with an average of 75% of net profit paid out between 2016 and 2020 (N$2,734 billion).

However, by 2017, the company had only one shareholder which is the government through NTPH.

The company did not say anything if it will change its dividends policy of paying out a minimum of 70% of profit after tax to its shareholders given the new ownership structure.

Using the annual average, the company has also delivered if the return on equity (41%) for the same period can be used.

In terms of growth prospects, Simonis Storm anticipated it to emanate from customers for fibre, enterprise services (B2B), and other value-adding services (such as Mobile Financial Services, 5G, AI, and IoT).

As a result, the company is targeting 6% revenue growth (2022) from data usage (11%) and 7% content revenue growth.

This is because there are still avenues for growth in terms of data usage, as half of the Namibian population (51%) actively make use of the internet and only 28% is active on social media platforms (98% via mobile devices), the Hootsuite research for 2020 shows.

Despite the company revenue projection, they are not a monopoly.

In terms of fibre/internet, another listed company, Paratus Namibia is a competitor within (ICT) space locally and the threat of other international competitors (MTN).

Potential investors are encouraged to read the IPO prospectus to decide, while MTC to do a tour around the country to meet and talk to all those who aspire to invest. Email: erastus@thevillager.com.na

 

Julia Heita

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