By: Andrew Kathindi
Government says that selling its shares in MTC to the general public and institutional investors will not change or affect the asset base of MTC.
The asset base is the value of assets that constitute the basis for the valuation of a company.
Responding to questions in the National Assembly posed by Namibian Economic Freedom Fighters (NEFF) leader, Epafras Mukwiilongo, finance minister Iipumbu Shiimi said that the selling of government’s shares will merely results in one shareholder being partly replaced by many other shareholders “and has no impact on the asset base of MTC. The listing will open the capital markets to MTC as MTC will have a broader shareholder base.”
“The proceeds from this listing will greatly enhance the ability of Treasury to meet the various demands and to apply the funds according to appropriate priorities. The money will also provide an alternative to counter potential additional borrowing requirements and subsequent high debt levels.”
MTC shares went on public offer on 20 September while the closing date is on 1 November. The anticipated listing date on the Namibian stock exchange (NSX) is currently set for 19 November.
According to Shiimi, government’s objectives to list MTC included generating proceedings for government’s kitty, increase confidence in the government’s ongoing public enterprise restructuring program and to stimulate the local economy.
Shiimi said government also wants to inject new commercial and market influences into the MTC and to establish a broad shareholder base for MTC.
According to the MTC prospectus on the listing, 367,500,000 existing ordinary MTC shares were sold by the government at a subscription price of N$8.50 per share thereby selling N$3,123,750,000 (N$3.124 billion).
The prospectus further states that in the event that the offer is oversubscribed, the MTC board will consider previously disadvantaged Namibians, MTC staff, MTC customers, Namibian natural persons, Namibian Corporates and institutions first.
“The first objective was to develop the country’s financial sector. The financial sector is critical to the economic development. Currently, a significant amount of savings leaves the country for investment outlets in other countries. These savings can now be invested at home in MTC. Through our pension funds and insurance policies many Namibians will now become shareholders of MTC,” said Shiimi.
Shiimi added, “The government is not actively trading in shares. When the government acquired the remaining 34% shares through NPTH in MTC from Portugal Telecom, a licensing condition was placed on MTC by CRAN whereby 49% had to be sold to outside investors and for MTC to list on the NSX.”
Shiimi further argued that once listed, government’s 51% shareholding will appreciate in value if the share price of MTC increases on the NSX over time.
Government has thus far received N$600 million in dividends from 2021, compared to N$977 million in 2020, N$412 million in 2019, N$374million in 2018, N$488 million in 2017.
