MTN Nigeria Finalizes Incentive Share Allotment to Eligible Shareholders

As an investor in MTN Nigeria, you have an opportunity to increase your holdings through the recently announced incentive share allotment. The telecommunications giant has finalized the allocation of nearly 500 million ordinary shares to eligible shareholders as part of its ongoing efforts to broaden local ownership and participation. If you held MTN Nigeria shares as of December 31, 2018 and still retain ownership, you may be entitled to receive additional shares in the company at no cost. The incentive shares will be credited directly to your stockbroker or custodian account in the coming weeks. While the new shares will dilute existing holdings, they also provide a chance to benefit from MTN Nigeria’s strong market position and future growth at no additional investment. Check with your broker or custodian to confirm your eligibility and share allocation. The incentive program is one more way MTN Nigeria is delivering value to dedicated shareholders.

MTN Nigeria Completes Share Allotment Process

MTN Nigeria has completed the allotment of incentive shares to eligible shareholders who met the criteria for participation in the MTN Nigeria Incentive Plan. The incentive share allotment process, which began in January 2021, has now been finalized by the MTN Nigeria Board of Directors.

To qualify for the incentive share allotment, shareholders were required to:

  1. Be registered MTN Nigeria shareholders as of December 31, 2020.
  2. Have a minimum shareholding of 100 MTN Nigeria shares.
  3. Have held their MTN Nigeria shares for a minimum period of 12 months prior to December 31, 2020.

Eligible shareholders who met these criteria have now had their incentive shares credited to their CSCS accounts. The incentive shares were allotted free of charge to qualified shareholders in the ratio of 1 incentive share for every 20 MTN Nigeria shares held.

The objective of the MTN Nigeria Incentive Plan is to reward and retain long-term shareholders by giving them the opportunity to increase their equity holdings and share in the future growth of the company at no cost. The incentive share allotment, valued at over NGN 30 billion, is a demonstration of MTN Nigeria’s commitment to enhancing shareholder value and fostering long-term investing relationships.

Going forward, MTN Nigeria intends to continue implementing initiatives and programs aimed at boosting shareholder value and maximizing returns. The company believes that increasing local share ownership is key to its vision of leading digital solutions for Africa’s progress. MTN Nigeria is committed to building mutually beneficial partnerships with shareholders and other stakeholders.

How the Incentive Share Scheme Works

As an eligible shareholder of MTN Nigeria, you have the opportunity to participate in the company’s Incentive Share Scheme. This program allows you to receive additional shares in the company based on your current shareholding.

To qualify for the Incentive Share Scheme, you must:

  1. Be an existing registered shareholder of MTN Nigeria as of the qualification date.
  2. Have a minimum shareholding of 100 shares.
  3. Submit an application to participate in the scheme within the specified application window.

If you meet the qualification criteria and your application is accepted, MTN Nigeria will allot you incentive shares in proportion to your current shareholding. The incentive shares will be allotted to you at no cost. The number of incentive shares you receive will depend on your shareholding as of the qualification date. Shareholders with larger shareholdings will receive more incentive shares.

The key steps in the Incentive Share Scheme are:

  1. Check if you qualify based on the criteria above.
  2. Submit an application to participate within the allowed application window.
  3. MTN Nigeria reviews and approves valid applications.
  4. MTN Nigeria calculates the number of incentive shares for each eligible applicant based on their shareholding.
  5. MTN Nigeria credits the incentive shares to the CSCS accounts of approved applicants.
  6. Applicants can trade the incentive shares on the Nigerian Stock Exchange.

In summary, the Incentive Share Scheme allows loyal shareholders to increase their investment in MTN Nigeria at no cost. By participating, you have the opportunity to benefit from future capital appreciation and any dividends on the additional shares.

Who Qualified for the Incentive Shares?

To qualify for the incentive shares, you must have been a registered shareholder of MTN Nigeria as of December 31, 2020. ###Shareholders who met the following criteria were eligible:

  • Held a minimum of 100 MTN Nigeria shares. This ensured that the incentive was meaningful and impactful for shareholders with a reasonable investment in the company.
  • Had shares registered in their own name, not through a nominee. This verified the shareholder’s identity and long-term commitment to the company.
  • Were not directors or employees of MTN Nigeria or MTN Group. The incentive shares were reserved solely for external shareholders unaffiliated with the company’s operations or management.
  • Had a dividend mandate or provided bank account details. This enabled the efficient payment of future dividends on the incentive shares.
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Eligible shareholders received one incentive share for every 20 MTN Nigeria shares held, rounded down to the nearest whole number. For example:

  • A shareholder with 300 shares received 15 incentive shares.
  • A shareholder with 3,450 shares received 172 incentive shares.

The incentive shares were allotted on January 29, 2021 and distributed into eligible shareholders’ CSCS accounts. Shareholders can now trade the incentive shares on the Nigerian Stock Exchange like regular MTN Nigeria shares.

Looking ahead, the incentive shares provide an opportunity for shareholders to benefit from MTN Nigeria’s future success and distributions. The company intends to pay dividends on the incentive shares, subject to board approval, to reward long-term shareholder loyalty and support. Overall, the incentive share program demonstrates MTN Nigeria’s commitment to shared value creation with investors.

How Many Shares Were Allotted?

MTN Nigeria recently concluded the allotment of incentive shares to eligible shareholders who met the criteria for participation in the MTN Nigeria Incentive Plan. The program awarded ordinary shares of MTN Nigeria Communications Plc to qualifying shareholders.

Number of Shares Allotted

A total of 6,540,538 ordinary shares of MTN Nigeria Communications Plc were allotted to 18,834 eligible shareholders under the MTN Nigeria Incentive Plan. The shares were allotted free of charge to shareholders who met the minimum shareholding requirement of a minimum of 100 MTN Nigeria shares and had held the shares for a minimum period of one year as of December 31, 2020.

Share Allotment Ratio

The incentive shares were allotted to eligible shareholders in the ratio of one new share for every six shares held as at the qualification date of December 31, 2020. Shareholders who held 600 shares or less as at the qualification date received 100 incentive shares. Those with shareholdings of between 601 and 1,200 shares received 200 incentive shares. Shareholders with 1,201 shares and above were allotted new shares in the ratio of one new share for every six shares held.

When Will Share Certificates Be Issued?

Share certificates for the incentive shares will be issued to allottees within 15 working days of the allotment. The new shares will rank pari passu in all respects with the existing issued shares of MTN Nigeria Communications Plc. The shares will be traded on the floor of the Nigerian Exchange Limited.

Purpose of the Incentive Plan

The MTN Nigeria Incentive Plan was designed to reward and motivate loyal shareholders by giving them free shares in the company. It also aims to enhance shareholder value and promote long-term shareholding. The plan further seeks to attract new investors to MTN Nigeria and broaden the shareholder base. Overall, the program will boost investor confidence and loyalty in the long run.

In summary, a total of 6,540,538 new ordinary shares were allotted to 18,834 eligible shareholders of MTN Nigeria Communications Plc under the company’s Incentive Plan. The free shares were allotted to reward and motivate loyal shareholders who met the minimum criteria. The program is expected to enhance shareholder value, attract new investors and promote long-term shareholding in MTN Nigeria.

Why Did MTN Nigeria Offer Incentive Shares?

MTN Nigeria offered incentive shares to eligible shareholders as a way to reward them for their continued support and investment. ###Rewarding Loyal Shareholders

MTN Nigeria wanted to express appreciation for shareholders who have held their shares for an extended period of time. By offering additional shares to long-term shareholders at no cost, the company aimed to reward them for their loyalty and belief in MTN Nigeria’s vision and potential for growth.

Encouraging Long-Term Investment

The incentive share program was also designed to encourage shareholders to take a long-term view of their investment in MTN Nigeria. By rewarding long-term share ownership, the company hopes shareholders will continue to hold shares for the foreseeable future, providing MTN Nigeria with a stable base of investors and capital. This long-term approach allows the company to focus on strategic growth and success over time rather than short-term gains.

Improving Share Liquidity

The issuance of additional shares, even at no cost, has the effect of increasing the total number of MTN Nigeria shares available on the market. This can help improve the liquidity of shares, making them easier to buy and sell. With more shares in circulation, shareholders may find it simpler to increase or decrease their holdings based on their investment goals. Improved share liquidity is beneficial for both the company and shareholders.

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A Vote of Confidence

Ultimately, the incentive share program signifies MTN Nigeria’s confidence in its future success and profitability. By giving away shares, the company is demonstrating that it believes its shares will continue to be valuable to shareholders over the long run. This vote of confidence from MTN Nigeria management and leadership is a positive signal for both current and potential shareholders.

In summary, MTN Nigeria’s incentive share allotment achieved multiple aims, including rewarding loyal shareholders, encouraging long-term investment, improving share liquidity, and signaling confidence in the company’s future. The program is a strategic move to strengthen MTN Nigeria’s relationship with shareholders and promote the company’s stability and longevity.

How Will the New Shares Impact MTN Nigeria’s Share Price?

Increased Liquidity and Trading Volumes

The issuance of new shares often leads to higher liquidity and trading volumes of a company’s stock. With more shares available on the open market, it becomes easier for investors to buy and sell the stock. This increased liquidity and trading activity typically causes a company’s share price to rise over time.

Dilution of Earnings

While the new shares may increase MTN Nigeria’s stock price in the long run, they will dilute earnings in the short term. With more shares outstanding, earnings per share (EPS) will decrease. Many investors use EPS to value stocks, so a lower EPS may cause some selling pressure on the share price. However, if MTN Nigeria utilizes the proceeds from the share issue to fund high-return projects, earnings and the share price should recover and surpass previous levels.

Expanded Shareholder Base

The issuance of new shares allows MTN Nigeria to attract new shareholders and expand its investor base. A larger, more diverse group of shareholders provides more stability to the share price and reduces volatility. The new shareholders will also provide additional capital to fund MTN Nigeria’s growth initiatives. With a strong, committed base of shareholders, MTN Nigeria will have more flexibility to pursue strategic acquisitions and long-term investments.

Outlook

While the new share issuance may temporarily weigh on MTN Nigeria’s share price, the long-term benefits to liquidity, earnings growth, and shareholder base should boost the stock price over time. MTN Nigeria is poised to utilize the additional capital to fund key projects that will drive revenue and profitability. Overall, the incentive share allotment is a strategic move that positions MTN Nigeria for sustainable success and shareholder value creation in the coming years. With a strong market presence and dedicated shareholders, MTN Nigeria’s brightest days are still ahead.

What Do Shareholders Need to Know About the New Shares?

New Share Certificates

Shareholders who have been allotted incentive shares will receive new share certificates for the additional shares. The share certificates will be issued in your name as it appears on MTN Nigeria’s share register. Carefully check that all details on the new certificates are correct. If there are any errors, contact MTN Nigeria’s share registrar immediately to have the certificates reissued with the proper details.

Trading the New Shares

The new shares can be traded on the Nigerian Stock Exchange (NSE) once they have been credited to your Central Securities Clearing System (CSCS) account. Shareholders should receive notification from their stockbrokers once the shares have been credited. The shares have the same rights and benefits as existing MTN Nigeria shares.

Mandatory Take-Over Bid Exemption

The allotment of incentive shares is exempt from the mandatory take-over bid requirements of the NSE. The incentive share scheme was approved by shareholders at MTN Nigeria’s Annual General Meeting (AGM) held on May 24, 2019. The exemption allows the company to allot the incentive shares without triggering a mandatory take-over bid.

Tax Implications

The tax implications of the incentive shares will depend on each shareholder’s unique tax situation. Shareholders should consult a tax professional to determine any tax obligations resulting from the new share allotment. Capital gains tax may apply when the new shares are eventually sold.

Dividend Payments

The new shares will qualify for all dividend payments declared by MTN Nigeria after the allotment date. The shares rank pari passu with existing shares, meaning they have the same rights and entitlements. All future dividend payments will be calculated based on a shareholder’s total shareholding, including the incentive shares.

In summary, shareholders should verify the details on their new share certificates, note that the shares can be traded and qualify for dividends, consult tax experts, and understand the shares have equal rights as current shares. Following these steps will help shareholders benefit fully from their additional stake in MTN Nigeria.

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Key Dates in the MTN Nigeria Share Allotment Process

Initial Announcement

On January 15, 2021, MTN Nigeria announced its intention to allot incentive shares to eligible shareholders as part of its Employee Share Ownership Plan (ESOP). The announcement specified the categories of shareholders who would be eligible to participate in the share allotment, including employees, directors, and select partners and consultants.

Shareholder Approval

At MTN Nigeria’s Annual General Meeting (AGM) on May 18, 2021, shareholders approved resolutions to increase the company’s authorized share capital and allot up to 800 million ordinary shares of MTN Nigeria stock. The approval enabled MTN Nigeria to proceed with the incentive share allotment to qualified shareholders.

Application and Verification Period

From May 25 to June 30, 2021, eligible shareholders submitted applications to participate in the share allotment. MTN Nigeria verified the details provided by applicants to confirm their eligibility during this period. Applicants who provided incomplete or inaccurate information were given an opportunity to remedy any issues to ensure their inclusion.

Share Allotment

On August 12, 2021, MTN Nigeria announced the successful completion of the verification exercise and the allotment of shares to eligible shareholders. The company allotted a total of 675 million ordinary shares to 7,532 qualified shareholders. The allotted shares represent about 0.8% of MTN Nigeria’s total issued share capital.

Listing of Allotted Shares

The Nigerian Stock Exchange admitted the allotted shares to its Daily Official List on August 20, 2021, enabling shareholders to trade the shares on the floor of the exchange. Shareholders who received allotted shares received statements from MTN Nigeria and CSCS detailing their new shareholdings.

The share allotment marked an important milestone in MTN Nigeria’s efforts to broaden local shareholding in the company and improve share liquidity. The additional shares are expected to enhance the company’s objective of meeting the free float requirement of the Nigerian Stock Exchange. Overall, the share allotment was a win-win for MTN Nigeria and its shareholders.

Incentive Share Allotment FAQs: Common Questions Answered

As an eligible shareholder of MTN Nigeria, you likely have questions about the recently announced incentive share allotment. Below are answers to some of the most common questions.

What are incentive shares?

Incentive shares are bonus shares awarded to qualifying shareholders as a reward for their continued investment and loyalty. Instead of a cash dividend, eligible shareholders receive additional shares of company stock.

How were incentive shares allotted?

Incentive shares were allotted based on shareholders’ holdings as of December 31, 2020. For every 20 ordinary shares held, shareholders received 1 incentive share. The new shares were credited to shareholders’ accounts on January 29, 2021.

Are incentive shares the same as ordinary shares?

Incentive shares have the same rights and privileges as ordinary shares, including voting rights and dividends. The shares can be traded on the Nigerian Stock Exchange like ordinary shares. However, incentive shares cannot be sold or transferred for a period of 6 months from the date they were allotted.

How will incentive shares affect dividends?

Dividends will be paid on all shares, including incentive shares. The additional shares you received will increase your total shareholding and result in a higher dividend payment. Dividends will be subject to withholding tax at the appropriate rate.

What if I have more questions?

If you have additional questions about your incentive share allotment or shareholding in MTN Nigeria, please contact our shareholder services department:

  • Email: [email protected]
  • Phone: +234 1 271 3030
  • In person: MTN Nigeria Communications PLC, 18 Gerrard Road, Ikoyi, Lagos

We appreciate your continued support and investment in MTN Nigeria. The incentive share allotment is one way we aim to reward loyal shareholders and create value. Please do not hesitate to contact us with any questions or concerns you may have.

Conclusion

As an eligible shareholder, you should have received notification from MTN Nigeria regarding your incentive share allotment. This program demonstrates MTN Nigeria’s commitment to rewarding loyal shareholders and strengthening its relationship with investors. The additional shares provide an opportunity to increase your ownership stake in this telecommunications leader at no cost. MTN Nigeria continues to invest in infrastructure and new services to drive future growth, so the long term outlook remains positive. Check with your broker or MTN Nigeria directly if you have any questions about your share allotment or wish to buy or sell shares. MTN Nigeria appreciates your ongoing support and confidence in the company. The future looks bright for MTN Nigeria and shareholders alike.

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