Johannesburg-listed telecommunications group MTN said Tuesday it has received R4.5 billion (€260 million) from the sale of its Cyprus operation to Monaco Telecom.
MTN announced on 16 July that its wholly owned subsidiary, MTN Dubai Limited, had entered into an agreement in terms to 100% of MTN Cyprus to Monaco Telecom.
The sale was part of an ongoing portfolio review by MTN Group, it said. It has now been concluded.
MTN Cyprus, the group’s only business in the European Union, was acquired as part of the acquisition of telecoms holding company Investcom LLC in 2006.
The reason behind the sale was that the Cyprus business fell outside MTN’s core footprint in Africa and the Middle East.
Proceeds from the sale will be used towards the settlement of USD-denominated debt, MTN said.
MTN said on Tuesday that is has concluded the sale of its subsidiary in Cyprus to Monaco Telecom, and has collected €260-million, or R4.5-billion, in cash from the transaction.
“Shareholders are advised that this transaction is now concluded for proceeds of R4.5-billion paid
upfront in cash,” it said.
MTN Cyprus has gone from being owned by an African company to one that is more focused on Europe.
Monaco Telecom, a member of NJJ Holding, acquired 100% of MTN, whose turnover last year reached €123 mln, from the MTN Group – Africa’s biggest wireless carrier by subscribers.
The agreement values MTN Cyprus at about eight-times reported earnings before interest, tax, depreciation and amortization in 2017.
Under the agreement, MTN will let Monaco Telecom continue to use the MTN brand in Cyprus for up to three years in return for a commercial fee.
MTN CEO Rob Shuter said in March he was reviewing the company’s portfolio to make sure all divisions were self-funding and necessary parts of the business, highlighting conflict areas such as Syria, South Sudan and Yemen.
MTN launched commercial operations in Cyprus in July 2004, securing the second mobile telephony license on the island and soon became one of the leading providers on the island.
Over the past five years, the Cypriot company has increased its market share by 7% and its turnover was € 123 mln for 2017.
Outgoing CEO Philip Van Dalsen said in July the deal marks an important milestone for MTN Cyprus, its customers, staff and for Cyprus itself.
Perfect Match
“Monaco Telecom has developed innovative solutions and a strong technological approach to telecommunications – this is an ideal match as MTN Cyprus is a telecoms pioneer in Cyprus.
I assure that the adaptation to the new family of companies is going to be smooth and seamless”.
It is considered a key factor in Monaco Telecom's strategy to gain influence in the Mediterranean region.
Monaco Telecom is the provider of the Principality of Monaco but is currently expanding into new markets where it can offer its customers innovative products and services based on high-quality broadband networks.
It is a member of NJJ Holding – made up of leading providers in the markets of France, Italy, Switzerland, Ireland, Monaco and now Cyprus.
The Monaco company is 55% owned by French billionaire Xavier Niel, founder and largest shareholder of Paris-based telecommunications provider Iliad trading under the Free brand (France's second-largest ISP, and third mobile operator).
The Principality of Monaco maintains the remaining percentage of shares.
Neil – net worth $5.6 bln – has a portfolio that includes Orange Switzerland, which he acquired in 2014 for $2.9 billion and renamed Salt, and a controlling interest in French newspaper Le Monde
The Cypriot company was picked because it was viewed as the fastest growing provider in the country, seeing its customer increase over 20% in recent years.
“MTN Cyprus has become synonymous with innovation and innovative technologies in the country, while its key achievements and milestones were key elements of its selection process by new owners,” the statement said.
Johannesburg-listed MTN, which has businesses in over 20 countries in Africa and the Middle East, is expanding in the continent.
It has 221 million subscribers across all operations, with Nigeria and Iran its biggest markets.
MTN Cyprus with 426,000 customers was its smallest market.
According to the Monaco Telecom 2017 financial results, its revenues amounted to €149 mln while net income was €53 mln.
Some 84% of the company's revenue comes from its operations within Monaco, while 16% is from international activities.
