MTN Group Reports $15.8 Million Gain from Guinea-Bissau Sale

MTN Group reported a gain of $15.8 million from the sale of its Guinea-Bissau subsidiary to Telecel and a loss from disposing of Guinea-Conakry. This strategic divestment emphasizes MTN’s focus on larger, more profitable markets while managing financial challenges in smaller segments.

MTN Group, the leading telecommunications operator in Africa, reported a significant gain of R287 million ($15.8 million) from the sale of its Guinea-Bissau subsidiary to Telecel. This sale is part of MTN’s strategic initiative to divest from smaller West and Central African (WECA) markets, which collectively contributed only 7.3% to the group’s total revenue for 2023.

The transaction, which gained regulatory approval, saw MTN accepting a binding offer from Telecel for both MTN Guinea-Bissau and MTN Guinea-Conakry, with a nominal price of $1 for each entity. The sale agreement was finalized on December 15, 2023, following MTN’s classification of these businesses as held for sale by December 31, 2023.

Despite the gain from the Guinea-Bissau sale, the disposal of MTN Guinea-Conakry resulted in a loss. According to MTN Group’s financial results, the disposal incurred a reclassification of R1 370 million ($75 million) in accumulated foreign currency translation reserve (FCTR) losses to profit and loss. MTN indicated that the net liability position of Guinea-Conakry upon classification meant there was no further impairment required during the evaluation of its carrying value.

In December 2023, MTN Guinea-Bissau faced severe financial difficulties, including a R171 million ($9.4 million) loan default and insolvency, when liabilities exceeded its assets. Consequently, MTN Group will concentrate its efforts on more lucrative West African markets such as Ghana, Cameroon, and Côte d’Ivoire, which together accounted for 19% of the group’s 2023 revenue.

In summary, MTN Group’s divestment from Guinea-Bissau provided a financial boost, while the loss from Guinea-Conakry highlights the complexities of their operations in smaller markets. This strategic redirection aims to enhance profitability by focusing on key West African territories that yield greater revenue potential.

Original Source: thecondia.com