MTN Group has announced that it has concluded an agreement to sell and fully exit its 20% shareholding in Belgacom International Carrier Services SA (BICS) to Proximus NV/SA.
The company previously said in its 2020 interim and third-quarter results that it was in discussions regarding the sale.
The timing of the closing of the sale will be dependent on customary regulatory approval, MTN stated.
However, the transaction consideration compared to MTN’s market capitalisation results in a percentage below the categorisation threshold as prescribed in the Listings Requirements of the JSE Limited.
“Once all the conditions precedent have been fulfilled, MTN will receive proceeds of approximately €100 million (R1.8 billion) in cash,” it said.
The MTN Group said it intends to use this amount to pay down US dollar debt and for general corporate purposes.
Profit from sale
MTN classified BICS as a non-current asset held for sale and this transaction has resulted in a remeasurement of its carrying value resulting in a reduction of R397 million for the year ended 31 December 2020.
MTN said it will record a profit on disposal of BICS amounting to approximately R1.2 billion during the first half of 2021, mainly due to the release of the foreign currency translation reserve.
This will result in a net impact of R812 million over the two periods.
“The sale represents further progress in MTN’s stated asset realisation programme (ARP), which aims to reduce debt, simplify its portfolio, reduce risk, improve returns and unlock value,” the company stated.