MTN Uganda has attained a public float of 20 percent at the Uganda Securities Exchange (USE) and the giant telecom company in the country is now fully compliant with the minimum public float requirement set out in rule 32 (7) of the USE rules, 2021,
The purchase of all the shares, according to officials, is a vote of confidence in MTN Uganda but also amplifies investor confidence in Uganda’s equity market and by extension boosts the market capitalisation of the stock exchange, given the strongest subscription rate of 230 percent.
In 2021, MTN listed 20 percent of its shares on the USE with a 12.97 percent public float from the Initial Public Offering (IPO) and the company provided an undertaking to the USE that the remaining 7.03 percent would be completed by December 5, 2024.
The latest development comes after the company’s completion of its secondary market offer for the purchase of shares which ran from May 27, 2024, to June 10, 2024.
During the announcement of results from this secondary market offer for the purchase of shares at the MTN headquarters in Kampala, USE Chief Executive Officer Paul Bwiso revealed that they approved the company to be voluntarily suspended for two weeks from the USE to give Ugandans an opportunity to participate, look at the fundamentals of the company, the incentives shares that were provided and the dividends that were part of this offering from which they saw a lot of positive results in terms of participation.
“MTN’s market capitalisation is Shs3.8 trillion out of the total local market capitalisation of Shs11.8 trillion. That gives MTN a 32.3 percent contribution to the local market capitalisation and this growth has been signified in the trading turnover we have seen at the exchange from IPO,” he said.
In the same vein Grace Semakula from SBG Securities, the lead sponsoring broker on behalf of MTN Uganda noted that in total, 157,4807,373 shares were offered by MTN to the market and the preliminary results indicate a subscription rate of 230 percent making it the strongest subscription they have received from issuance in the local market. This performance translates into an over-subscription of 130 percent, he said.
“We have received several applications from both existing and new investors and the company’s shareholder base has grown to over 20,000. With strong retail participation in this offer, we have seen an average retail participation of Shs13.4 million invested per average retail applicant,” said Semakula.
On his part, MTN Uganda chairman Charles Mbire commended the success of the recently concluded secondary market offer which he said in addition to being oversubscribed, has resulted in approximately 19,600 Ugandan investors owning a stake in the company that employs many Ugandans, on top of paying taxes.
“We are proud to have helped facilitate the broadest possible shareholder base in Uganda, with regional participation and in so doing, further developing the equity capital markets in this country.”
For her part, MTN Uganda Chief Executive Officer, Sylvia Mulinge said that the company’s old investors on the register as of June 12, 2024, and the new investors who participated in the secondary offer are eligible for the next dividend payment worth Shs143 billion translating to Shs6.4 per share which she said will be paid by June 25, 2024. This will bring the total dividend the company has paid to its shareholders since the IPO in December 2021 to Shs864 billion.
This is a very big boost for MTN-Ugandaif you add the achievement of paying Shs1.1 trillion for the year 2023.
