Embattled mobile-phone giant, MTN encounters severe headwinds in Nigeria and Ghana.
Before the telecom industry could recover from the shock of the $8 billion, the Nigerian Central Bank demanded from MTN following allegations of improper foreign exchange transactions, the federal Attorney General slammed on the company a tax debt of $2 billion. That brings total payments demanded to a crippling $10 billion.
Well-wishers of MTN had heaved a sigh of relief when the phone company paid off half of a penalty of one billion dollars imposed on it by the telecom regulator for flouting rules on unregistered subscribers.
MTN’ s credit rating soared. 10 Nigerian banks provided it with a Whooping loan facility of $20 billion – a huge chunk of the available credit in the banking system.
But there have been missteps by MTN in gauging the size of West Africa’s financial market. The $230 million Ghana IPO fell lower than expected. The over one billion dollars Nigerian offering is now apparently in the cooler because of “market conditions”.
The prayer is that MTN would find a way of dealing with it’s embarrassing ballooning debt profile . Even by American standards, a repayment of$10 billion could be existential.