MTC shares ‘not for elites’
The public enterprises minister has debunked talks that powerful and politically connected hawks are lining up to grab shares in one of the government’s most profitable conglomerates.
OGONE TLHAGE
WINDHOEK
Public enterprises minister Leon Jooste says government is not using MTC’s Initial Public Offering (IPO) as an opportunity to place shares of the highly sought-after entity into the hands of wealthy and politically connected individuals, but as a means to broaden its ownership.
Namibian Sun has it on good authority that the listing has been approved, paving a way for the mobile telecommunications giant to shed some of its stake to non-state owners.
Government had mooted the sale of MTC shares on the Namibia Stock Exchange (NSX) as far back as 2016, while the second phase of the Harambee Prosperity Plan (HPP II) outlined raising as much as N$3 billion from its sale to go towards government’s debt reduction initiatives.
Government had received N$1.72 billion in dividends alone from MTC from the period 2016 to 2020, according to information contained in the company’s annual reports.
MTC has also been instrumental in making various infrastructural investments in the telecommunications sector as demonstrated through its 081Nation project in which over N$1 billion had been targeted at improving its national network.
But talk is rife that powerful individuals are pushing for the listing to get the nod so that they can use their financial muscles to lay their hands on the lucrative state entity.
As such, these individuals have apparently been advising government to relax its grip on the telecommunication sector and allow private players into that space.
This has left many Namibians wondering why government is reducing its stake in arguably the country’s most profitable state-owned entity.
For example, the company declared N$569.5 million dividends for the financial year 2019/2020, compared to N$2.7 million declared by its sister company Telecom Namibia.
‘Completely false’
“The allegation that the shares are targeted by ‘highly connected, high net worth individuals’ is completely false,” Jooste told Namibian Sun yesterday.
“In fact, the second IPO objective is to broaden economic empowerment through ownership by ordinary Namibian citizens in a profitable public entity,” the minister added of government’s rationale to sell shares in its golden goose.
According to Jooste, listings done in the past indicated that institutional investors such as the Government Institutions Pension Fund (GIPF) and asset management companies often bought the biggest portions of shares on offer.
“The past four IPOs in Namibia have shown that the institutional investors accounted for between 69% and 83% of investments, with the retail (public) representing the balance. The institutional investors are pension and unit trust funds and, therefore, represent broad-based representation,” he said.
The IPO would also be the biggest in Namibia once MTC is listed, according to Jooste.
Retaining controlling stake
“This will … create an attractive opportunity for the institutional investors to invest in a local - rather than foreign – assets, thereby retaining these investments in our domestic economy,” the minister said.
Government plans to retain a controlling 51% stake in MTC when the mobile operator is listed on the local bourse, leaving 49% of the company’s shares up for grabs.
GIPF, which has previously shown interest in buying into the company, will be allotted a 20% stake in the mobile operator as an institutional investor, with MTC staff also expected to be allocated shares under an employee benefit scheme.
According to the Fiscal Strategy for 2021/22 to 2023/2024 Medium Term Expenditure Framework, MTC is valued between N$6 billion and N$7.2 billion. MTC will become the first state-owned enterprise to be listed on the NSX.
WINDHOEK
Public enterprises minister Leon Jooste says government is not using MTC’s Initial Public Offering (IPO) as an opportunity to place shares of the highly sought-after entity into the hands of wealthy and politically connected individuals, but as a means to broaden its ownership.
Namibian Sun has it on good authority that the listing has been approved, paving a way for the mobile telecommunications giant to shed some of its stake to non-state owners.
Government had mooted the sale of MTC shares on the Namibia Stock Exchange (NSX) as far back as 2016, while the second phase of the Harambee Prosperity Plan (HPP II) outlined raising as much as N$3 billion from its sale to go towards government’s debt reduction initiatives.
Government had received N$1.72 billion in dividends alone from MTC from the period 2016 to 2020, according to information contained in the company’s annual reports.
MTC has also been instrumental in making various infrastructural investments in the telecommunications sector as demonstrated through its 081Nation project in which over N$1 billion had been targeted at improving its national network.
But talk is rife that powerful individuals are pushing for the listing to get the nod so that they can use their financial muscles to lay their hands on the lucrative state entity.
As such, these individuals have apparently been advising government to relax its grip on the telecommunication sector and allow private players into that space.
This has left many Namibians wondering why government is reducing its stake in arguably the country’s most profitable state-owned entity.
For example, the company declared N$569.5 million dividends for the financial year 2019/2020, compared to N$2.7 million declared by its sister company Telecom Namibia.
‘Completely false’
“The allegation that the shares are targeted by ‘highly connected, high net worth individuals’ is completely false,” Jooste told Namibian Sun yesterday.
“In fact, the second IPO objective is to broaden economic empowerment through ownership by ordinary Namibian citizens in a profitable public entity,” the minister added of government’s rationale to sell shares in its golden goose.
According to Jooste, listings done in the past indicated that institutional investors such as the Government Institutions Pension Fund (GIPF) and asset management companies often bought the biggest portions of shares on offer.
“The past four IPOs in Namibia have shown that the institutional investors accounted for between 69% and 83% of investments, with the retail (public) representing the balance. The institutional investors are pension and unit trust funds and, therefore, represent broad-based representation,” he said.
The IPO would also be the biggest in Namibia once MTC is listed, according to Jooste.
Retaining controlling stake
“This will … create an attractive opportunity for the institutional investors to invest in a local - rather than foreign – assets, thereby retaining these investments in our domestic economy,” the minister said.
Government plans to retain a controlling 51% stake in MTC when the mobile operator is listed on the local bourse, leaving 49% of the company’s shares up for grabs.
GIPF, which has previously shown interest in buying into the company, will be allotted a 20% stake in the mobile operator as an institutional investor, with MTC staff also expected to be allocated shares under an employee benefit scheme.
According to the Fiscal Strategy for 2021/22 to 2023/2024 Medium Term Expenditure Framework, MTC is valued between N$6 billion and N$7.2 billion. MTC will become the first state-owned enterprise to be listed on the NSX.
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