MTN Group to leave SA?

[bekdik]

http://www.itweb.co.za/index.php?op...roup-to-leave-sa&catid=260:telecoms&Itemid=59

This morning, MTN would neither confirm nor deny speculation that its group function plans to abandon SA in favour of Dubai, a location closer to its higher revenue earners.

ITWeb has learned from several independent sources that the company plans to move its group operations out of the country and eventually delist from the Johannesburg Securities Exchange, leaving the local business as a subsidiary of the company, or even up for sale.

I wonder how this will affect the south African operation.

 

[Ou grote]

Time to buy some MTN shares.

 

[LazyLion]

I wonder how this will affect the south African operation.

Not much I would imagine. People would hardly notice on the ground. Business as usual. Unless they decide to sell.

 

[savage]

Now THAT is AYOBA!

 

[milomak]

the above is highly unlikely due to exchange control issues.

 

[diabolus]

Well MTN services on the ground can't get much worse, so it can only get better.....maybe it will leave a gap for the likes of T-Mobile/Orange to get into the SA market...hell even Virgin who seems to be dependent on Cell-Cs rather inferior network, might see a gap there.

 

[AnomalyNexus]

abandon SA in favour of Dubai, a location closer to its higher revenue earners.

That is unlikely to be the true reason. There is little benefit in moving HO closer to some particular group of your customers. If you want to focus on some group of customers you move more *staff* to that office, not your HO & admin.

It kinda makes sense though: Distancing yourself from the whole ICASA & Dept of Communication. Avoiding the SA labour market (Unions, BEE, difficult to fire staff etc). Dubai also has no pothole/Eskom issues.

 

[BLIXEMPIE]

But would be kinda sad to see SA being the head of one less significant thing.

 

[milomak]

maybe it will leave a gap for the likes of T-Mobile/Orange to get into the SA market...hell even Virgin who seems to be dependent on Cell-Cs rather inferior network, might see a gap there.

while i believe the article to be rubbish; it doesn't say that MTN would disband it's SA operations. and why would they given that SA accounts for more than a quarter of their revenues and ebitda?

 

[diabolus]

while i believe the article to be rubbish; it doesn't say that MTN would disband it's SA operations. and why would they given that SA accounts for more than a quarter of their revenues and ebitda?

They were trying to "sell off" their company for the last 2 years almost, both Bharti and the BEE nonsense. It sure looked like someone is trying to "abandon" MTN in some form (cashing in and/or getting out). The whole Bharti deal that flopped [or did it?] , that was a "take-over/merger" deal [in favor of India]....speaking of which:

http://wirelessfederation.com/news/18466-sources-reveal-why-the-bharti-mtn-deal-failed/

Why the Bharti-MTN deal failed

It is learnt that the South African governments treasury wrote to MTN on September 11 demanding that the merged entity be domiciled in South Africa (a request earlier made in mid August as well) AND that it should be listed in both countries, OR the deal would not be blessed (South African government’s pension fund, Public Investment Corp, holds 21% stake in MTN).

Members of the South African treasury had visited India on September 24 to understand the regulatory and legal framework of Indian laws and deliberate upon hurdles to the deal. The Indian side revelaed that the dual listing structure would result in huge tax losses for India among other factors.

The South African treasury insisted on a parallel listing via the trust route. Such parallel listing would mean creating two trusts, both listed, one in India and one in South Africa. Both trusts would mirror a share swap deal. Such parallel listing would have been compliant with existing Indian laws.

Helloooo, no one see what is happening here? The govt. is preventing the merger because Bharti wants MTN to delist and list under them in India....so what do you do? Hmmm...how about moving your HQ somewhere else and become an Tax entity in a country free of government interference and THEN merge?

 

[milomak]

Helloooo, no one see what is happening here? The govt. is preventing the merger because Bharti wants MTN to delist and list under them in India....so what do you do? Hmmm...how about moving your HQ somewhere else and become an Tax entity in a country free of government interference and THEN merge?

except that doesn't solve the problem. the biggest assets still lie in South Africa. it also doesn't solve the problem that despite what the article says, even they moved the main building to Dubai; they wouldn't be able to delist MTN in SA.

EDIT: To delist. MTN or some other investor would have to buy the shares off the people who already hold them. I cannot remember off hand, but I think only when there is a shareholder that holds more than 90% of shares can that company be delisted.

The Indian exchange controls were as much to blame as the South African exchange controls. And another thing you fail to mention is that MTN would have also been buying a stake in Bharti. So MTN would have owned a part of Bharti and Bharti would have owned a part of MTN. That deal very much WAS NOT a way for MTN to exit South Africa.

EDIT2: Also consider this.The South African government were basicaly saying that they will be supportive of the deal if the combined company is dual listed. Then consider that the South African government has allowed companies to expand offshore by being dual listed – Anglo, SAB, Mondi, Investec, DiData, Old Mutual. I may have missed one or two. It is then thr Indian authorities that say no to dual listing. Not willing to entertain that.

 

[oronte]

I think it's safe to say the Indian government was to blame for that failure not SA. However this article seems like rubbish to me let us not forget who owns most of MTN, does anyone honestly think South Africans (government and other shareholders) are going to let go of one of the only successful SA companies?

 

[tco21]

no chance in hell. Certain parties didn't allow the bharti deal, why would they allow this?

 

[BBSA]

Hope they take their racist ads with them.