MTN Uganda looks at EAC market for investors

MTN Uganda, a subsidiary of the MTN Group, recently received approval from Kenya's capital markets to market its Initial Public Offering (IPO) in Kenya, a move that has been met with enthusiasm from analysts and investors. In an exclusive interview with CNBC Africa, MTN Uganda CEO, Wim Vanhellepute, shed light on the company's decision to list on the Uganda Securities Exchange (USC) and the shared value opportunities it presents for both the company and its stakeholders. One of the key reasons behind MTN Uganda's decision to float 20% of its shares on the USC is a license obligation that was part of the company's license renewal last year. This strategic move also aligns with the MTN Group's broader objective of creating shared value in the markets where it operates. Vanhellepute emphasized that by spreading the value within the local communities and countries, MTN aims to benefit not only the stakeholders but also the company itself. The CEO underscored that while the 20% share offering meets the current obligation, there may be room for further offerings in the future depending on the outcomes. MTN Uganda's approach to offering five bonus shares for every 100 shares purchased by an African community member is aimed at enhancing localization through the IPO. By incentivizing local participation, the company seeks to create a sense of belonging within the East African community, fostering unity across borders. This allocation policy reflects MTN Uganda's commitment to prioritizing Ugandan and East African investors, rather than relying heavily on foreign buyers. Despite the challenges posed by the ongoing COVID-19 pandemic and uncertainties around vaccine distribution in the region, MTN Uganda remains optimistic about the potential impact of its IPO on the USC. The company's innovative MIPO platform allows customers to easily open accounts, apply for shares, and pay through the MTN Uganda mobile money platform, creating an opportunity for millions of new shareholders to enter the capital markets. Vanhellepute expressed confidence in the transformative potential of this initiative, envisioning increased liquidity and performance for the USC as a result. Looking ahead, MTN Uganda's focus remains on maximizing local and regional participation in its IPO, with a view to setting a precedent for other companies to follow suit in the future. While there are currently no plans for cross-listing on other stock markets within the region, MTN Uganda has made it seamless for East Africans, including Kenyans, to participate in the IPO through the USC's Easy Portal. The company's commitment to inclusive participation underscores its vision of creating shared value and fostering economic growth across East Africa.