Staff Writer
Government could be forced to review the set timelines and defer the listing of Mobile Telecommunications Limited (MTC) due to COVID-19 outbreak, for what was to be the country’s biggest listing of a Namibian company on the Namibian Stock Exchange (NSX).
According to the initially announced timelines, MTC was expected to be listed on the bourse by July 2020, after having submitted its listing application to the Namibian Stock Exchange (NSX) by February 2020, with the opening date for its public offer having been set for March 2020 and closing in June 2020.
“We are discussing the matter and we will make an announcement soon, “Public Enterprises minister Leon Jooste said when contacted by the Windhoek Observer.
Already it had emerged that government, which owns the company through the Namibia Post and Telecommunication Holdings, is planning to retain a controlling 51 percent stake in MTC when the mobile operator finally lists.
Simonis Storm Equity Analyst, Shaun-Lee Lahner said considering the negative economic conditions as a result of the impact of COVID-19, the postponement of the Initial Public Offering would be advisable.
“From an investor’s point of view, given the uncertainty and market volatility (risk) brought on by Covid-19, it would be wise to postpone the MTC IPO for now [Risk-off environment]. We believe that investors are waiting to see through the virus, i.e., for a successful vaccine or control of the virus, therefore the situation is fluid,” Lahner said.
“We do not know exactly how deep we are and / when a turnaround will be – more waves expected globally. Closer to home, we are not convinced to have seen the full impact of Covid-19 yet, nor w.r.t the current reported figures – testing continues. Just to reiterate, Namibia reported 16 cases of which nine have recovered.”
IJG Securities Head of Research, Eric van Zyl the negative impact of COVID-19 will impact company evaluations.
“The impact of the COVID-19 measures will have a negative impact on all company revenues. If you have a decrease in revenue, it will impact on your bottom line. Things will be worse on the before tax side. Company evaluations will be slightly negative than before and vary from industry to industry,” he said.
NSX Chief Executive Officer, Tiaan Bazuin was tightlipped on the possible changes to the MTC listing but was quick to point out that the bourse was recording increased listing interest by companies.
“As you can expect dealing with the virus and the shutdown has had its challenges, however the NSX stayed open throughout the lockdown as an essential service, without having to limit our service offering. If the Central Securities Depository had been up and running it would have been easier and taken more risk out of the market. As FIM bill is being passed we hope that project can proceed at speed soon. Interestingly enough we have been seeing more interest in listing in spite of the current situation,” he said.
MTC is the country`s biggest mobile company, with over two million subscriber followed by another government owned entity TN Mobile, with about a 100,000 recorded N$2,6 billion in revenue for the 2019 financial year, up from N$2,4 billion reported the previous financial year and an after-tax profit of N$797 million.
IJG Securities and PSG Wealth Management (Namibia) have been appointed sponsoring brokers for the listing project.
