Telecoms company MTN proposes to pay $1.5bn to settle a record $3.9bn fine in Nigeria.
|||Lagos - MTN has proposed to pay 300 billion naira ($1.5 billion) to settle a record $3.9 billion fine in Nigeria for missing a deadline to disconnect unregistered subscribers that the government claims included Boko Haram Islamic insurgents.
Africa’s biggest wireless operator made the written offer, made up of cash installments, bond purchases and network access, to the Nigerian government on February 24, according to a letter to the government from the company’s lawyer, former US Attorney General Eric Holder. The Senate Committee on Communications met to discuss the matter on Thursday and concluded that the negotiations with MTN must continue for two more weeks.
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The Johannesburg-based company “cannot confirm or deny” the $1.5 billion figure, spokesman Chris Maroleng said by phone. “When we reach a resolution with the authorities we will inform shareholders of that fact through the Johannesburg Stock Exchange news service,” he said.
MTN was fined in October for missing a deadline to disconnect 5.1 million subscribers deemed to be improperly registered in the country by the government, which is conducting a crackdown against Islamist insurgents. The Boko Haram group’s campaign to impose its version of shariah law has led to the death of more than 10 000 Nigerians since 2009. MTN shares have declined more than 23 percent since the fine was made public, valuing the Johannesburg-based company at R272 billion ($17.6 billion).
Five payments
MTN’s proposal includes the 50 billion naira that was paid last month in order to continue negotiations and a further 100 billion naira in five annual installments between the signing of an agreement and the end of 2020. The company also pledged to purchase 80 billion naira of Nigerian sovereign debt issued on international markets in 2016-2017 “as a demonstration of its commitment to and confidence in the Nigerian economy”. Thirdly, MTN would give the government access to its fibre network until 2020, an offer the company valued at 70 billion naira.
MTN’s management, the Nigerian telecommunications regulator and Minister of Communications Adebayo Shittu should report back to the Senate in two weeks with the outcome of discussions, according to the conclusions of the committee.
“$1.5 billion is in the right ballpark to settle the fine,” Dobek Pater, managing director of research firm Africa Analysis, said by phone. “It is on the low side of what would be reasonable. I expect a settlement of about $2 billion.”
MTN said it put aside about $600 million toward the payment at the company’s full-year earnings on March 3. Nigeria is the company’s biggest market with more than 61 million customers, about a third of the population.
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