MTN to sell its stake in BICS as part of divestment plan
South African telecom-giant MTN Group announced on Tuesday that it will sell its 20 percent shareholding stake in Belgacom International Carrier Services (BICS) to Belgian state-controlled telecoms firm Proximus for $121.41 million.
However, the timing of closing is dependent on customary regulatory approvals. Once all the saleconditions,legal precedent, has been fulfilled, MTN will receive proceeds of the sum in cash, which the Group intends to use to pay down US dollar debt and for general corporate purposes.
“The sale represents further progress in MTN’s stated asset realization program, which aims to reduce debt, simplify its portfolio, reduce risk, improve returns and unlock value,” MTN said in a statement to shareholders.
MTN is knee-deep into a $1.68 billion divestment plan aimed at reducing debt, simplifying its portfolio, and improving returns over the next three to five years.
The transaction consideration compared to MTN’s market capitalization, results in a percentage below the categorization threshold as prescribed in the Listings Requirements of the JSE Limited.
BICS was classified as a non-current asset held for sale and this transaction has resulted in a remeasurement of it carrying value resulting in a reduction of $26.77 million for the year ended 31 December 2020, according to the statement.
“MTN will record a profit on disposal amounting to approximately $80.9 million during the first half of 2021, mainly due to the release of the foreign currency translation reserve. This results in a net impact of $54.75 million over the two periods,” MTN said.
BICS’ network connects IoT devices with 2G, 3G, and 4G to more than 700 global mobile operators; in parallel, it also develops one of the largest NB-IoT/LTE-M networks, with coverage in 30 countries and through its eSIM solution, manufacturers can embed connectivity and switch networks on-demand.
MTN acquired its stake in the company in 2009 when it merged its own wholesale carrier services business into BICS.