Latest news with #Ush200
Zawya
21-04-2025
- Business
- Zawya
South Africa: MTN Group nets $30mln from sale of 1.5bn shares in Ugandan subsidiary
South Africa's MTN Group Ltd made a net gain of R564 million ($29.76 million) from the sale of its 1.57 billion shares in the Ugandan subsidiary despite offering the stake at a substantial discount in a bid to comply with a requirement to offload a minimum stake of 20 percent to minority investors. Latest disclosures through the company's audited financial statements (2024) show that the proceeds generated from the sale of the shares (net of taxes and transaction costs) amounted to R1.03 billion ($54.67 million) resulting in a net gain of R564 million ($29.76 million).'Proceeds generated from the sale of shares, (net of taxes and transaction costs) amounted to Ush214 billion (R1 036 million). This resulted in a net gain of R564 million recognised in equity as a transaction with non-controlling interests,' the group says. The group disposed of 7.03 percent stake equivalent to 1. 57 billion shares in MTN Uganda as part of its localisation plan that reduced its shareholding in the subsidiary to 76.02 percent from 83.05 percent. The transaction which was completed in June last year (2024) came after the group managed to sell a 12.97 percent stake in MTN Uganda in November 2021 through an initial public offering (IPO) that was priced at Ush200 ($0.05). The share sale in the secondary market aimed to help MTN comply with Uganda's local ownership rule that requires foreign telcos operating in the country to cede at least 20 percent shareholding to the public through the stock market. The offer which ran between May and June 10, 2024, was priced at discount of Ush170 ($0.04) per share compared to the original IPO price of Ush200 ($0.05) per share. The company also offered 30 free shares for every 140 shares allocated with the incentive shares amounting to a significant discount and making the secondary offer more generous than the IPO. Consequently, the sale of the additional shares was oversubscribed by 2.3 times, receiving subscription of three billion shares, reflecting the impact of the incentives that included free shares. In 2019 the Ugandan government directed foreign-owned telecoms operating in the country to list at least 20 percent of their shares on the local bourse within two years to boost Ugandan ownership in the sectorThe policy shift put pressure on multinationals operating in the country such as MTN, Airtel and Lycamobile to sell shares to the public. President Yoweri Museveni complained that the country was draining its scarce foreign exchange reserves through foreign-owned telecoms repatriating their profits abroad. Last year Airtel Africa Plc disclosed that it will also sell additional shares amounting to a 9.11 percent stake in its Ugandan subsidiary through a secondary offer to comply with Kampala's listing requirements. The multinational in November 2023 managed to sell 4.35 billion shares equivalent to a 10.89 percent stake in Airtel Uganda's initial public offering (IPO) and failed to meet the ownership rule. Airtel Africa said it had received a regulatory extension to sell the balance of 3.64 billion shares by November 2026, a move that will see it replicate MTN group which successfully offloaded a 20 percent stake in MTN Uganda in two transactions including a secondary offer conclude in June 2024Airtel Africa sold its shares at a price of Ush100 ($0.02) per share in the IPO that also offered incentive shares on a band subscription volume to attract investors. Retail investors who applied for more than 2,500 shares, for instance, received 10 free shares for each 100 shares allocated while institutional investors who applied for at least 1.85 billion shares were offered 112 free shares for each 100 shares allocated. MTN group's operations in the continent have faced several challenges including the conflict in Sudan's capital Khartoum which started on April 15, 2023, between Sudanese Armed Forces and the Rapid Support Forces leading to the destruction of state-owned infrastructure in the city. The ongoing conflict in Khartoum has resulted in loss of revenue and earnings for MTN's subsidiary due to prolonged hyperinflationary environment leading to an impairment of R11. 72 billion ($618.66 million) relating to MTN Sudan's non-current assets.'Accordingly, the future economic benefits that can be derived from MTN Sudan's operations have declined,' the group says. Last year (2024) the group gained R1.3 billion ($68.61 million) from the sale of subsidiaries in Afghanistan and Guinea-Bissau and a loss of R1.9 billion ($100.27 million) on the sale of a subsidiary in Guinea-Conakry. The sale of MTN Guinea-Bissau and MTN Guinea-Conakry was concluded on August 1, 2024, and December 30, 2024, respectivelyThe group also disposed of 686 million shares in MTN Ghana to Ghanaian citizens as part of the Group's localisation strategy reducing the group's shareholding to 73.99 percent from 81.04 percent. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. ( James Anyanzwa
Zawya
14-03-2025
- Business
- Zawya
Why Ugandan tea farmers are picking peanuts from toil?
Uganda's estimated 600,000 smallholder farmers continue to earn low returns from their toil, even when overall production has faced shortages. The problem, sector players say, ranges from the poor quality crop to factors beyond their control, such as lingering effects of the Russian invasion of Ukraine. So far, farmers here have earned between $0.05 and $0.09 per kilogramme of green leaf, insufficient to cover the cost of production. For growers to break even, the Uganda Tea Association (UTA) says the price of green tea should be above $0.13.'The crop levels of Uganda are very low as is across the region. We, therefore, expect that the quantities shall remain low for a while till after the expected rains of the upcoming season set it,' says Victoria Ashabahebwa, Uganda Tea Association board chairperson. Raising green leaf farm gate prices depend on the factory's respective business capacities, according to Onesimus Matsiko, a consultant. The challenge, he says, is that most of the processors who set the prices are also earning barely enough for them to recoup production costs, highlighting the crisis Uganda's multimillion-shilling tea economy has been locked in impacting export earnings. A February 25 report of the Parliamentary Committee on Tourism, Trade and Industry confirmed the crisis in Uganda's tea industry saying it is struggling to stay afloat since the Russia-Ukraine war broke out in February 2022, leading to a global economic shock, depressing demand for tea and causing prices to fall. The slow recovery of the industry has caused anxiety among farmers, especially those from the Rwenzori region in western Uganda, who are protesting what lawmakers call absurdly low prices, with some even cutting down their tea bushes. The situation is dire, with the average price of Ugandan black tea in the Mombasa auction falling sharply from around $2 per kilogramme of made tea to the current less than $1 per kilogramme, below the production cost, the lawmakers noted. The green leaf price has declined by over 50 percent, from Ush600 ($0.16) to Ush200 ($0.05) per kilogramme, with some farmers fetching as low as Ush140 ($0.03) per kilo. Tea sales at the Mombasa auction have also gone down, largely because traditional big buyers are facing internal turmoil. Government officials said they have tried to revive the sector including the provision of subsidised fertiliser and allocation of Ush126 billion ($32.6 million) to tea processing factories. But it didn't amount to much, according to the report. The Uganda tea industry, just like peers in the region, has also been impacted by the effects of the climate change, seeing longer dry seasons, leading to reduced yields and quality. The entire region has relied on Egypt, Pakistan, UK and some Middle Eastern countries to buy their tea.
