MTN faces shareholders’ backlash over USD-Indexed Tower Leases 

MTN Nigeria’s (MTNN) shareholders have registered their displeasure about the company’s recent actions and how they affect their investment stakes. The firm had, in recent weeks, come under fire among other concerns over its decision to continue paying tower leases in USD amid Nigeria’s volatile naira economy, an action that could lead to a potentially irreversible removal of value if decisive action was not taken promptly. 

Despite MTNN’s robust cashflows and a net cash balance of N345 billion as of December 2023, shareholders remain unconvinced of its ability to weather the storm. The realisation of N740 billion in FX losses, and a host of other potential future liabilities such as the $47.8 million tax dispute with Nigerian authorities, casts a shadow of doubt on the company’s financial resilience. 

Following the development, the shareholders emphasised the urgent need for MTNN to localise its value chain and processes. 
“Prioritising naira-backed tower companies with no FX indexation could mitigate future risks and ensure a more stable financial outlook for the company. 
  
“Also, key inputs such as financial capital, towers, and energy components can be sourced locally, reducing dependency on foreign currencies. Encouraging local tower companies with comparable rates to their foreign counterparts could incentivise domestic investment and bolster the local capital markets,” Adebayo Olagoke, another shareholder stated.
  
With record losses in FY 2023 and mounting shareholder concerns, MTNN faces a critical juncture in its trajectory. As shareholders prepare for an Extraordinary General Meeting (EGM) to address these issues, the focus remains on charting a course for sustainable growth and stability in the years ahead.