MTN Zambia IPO fiasco ends in failure

The listing of MTN shares on the Lusaka Stock Exchange (LuSE) through Ikulileni Investments has been called off after the share offer was under subscribed.

Ikulileni Investments was set to debut on the LuSE on June 16, 2015 with 11.9 per cent of MTN shares made available to the public, but the offer was shelved with only 24 hours to go before the actual listing.

The share offer was marred by controversy after it was discovered that some directors of MTN, including board chairman Valentine Chitalu, were also shareholders of Ikulileni Investments.

It was further revealed that Ikulileni Investments did not meet the listing rule of having a three-year profitability history since it was only incorporated in October 2014 for purposes of creating a special purpose vehicle for the MTN listing.

Ikulileni Investments also recorded low subscription rates.

It is believed that MTN has lost close to ZMW1 million (US$136,000) in sponsoring the share offer and the entire transaction and will request government for a three-year extension before it can consider coming directly to list on the exchange as part of the licence requirements.