MTN Group Achieves $15.8 Million Gain from Guinea-Bissau Sale…

MTN Group reported a gain of $15.8 million from selling its Guinea-Bissau subsidiary to Telecel, aligning with its strategy to exit smaller West African markets. However, it incurred a $75 million loss from the sale of MTN Guinea-Conakry. The company now aims to focus on larger markets such as Ghana, Cameroon, and Côte d’Ivoire, which contributed significantly to its revenue.

MTN Group, recognized as the largest telecommunications operator in Africa, has achieved a gain of R287 million (equivalent to $15.8 million) from the sale of its Guinea-Bissau subsidiary to Telecel. This divestiture forms part of MTN’s strategic move to exit from smaller markets in West and Central Africa (WECA), where designated contributions to the group’s revenue for 2023 stood at only 7.3%.

The transaction, which received necessary regulatory permission, included both MTN Guinea-Bissau and MTN Guinea-Conakry, with Telecel making a nominal offer of $1 for each entity. The sale agreement was completed on December 15, 2023, following the classification of both businesses as held for sale on December 31, 2023.

Despite the successful sale of MTN Guinea-Bissau yielding a profit, the associated sale of MTN Guinea-Conakry resulted in a financial loss. According to MTN Group’s 2024 financial disclosures, a loss of R1,370 million (approximately $75 million) due to accumulated foreign currency translation reserves was reclassified in the profit and loss statement.

The net liability circumstance pertaining to MTN Guinea-Conakry permitted no further impairment when measuring at the lesser of the carrying amount and estimated fair value minus selling costs. MTN Guinea-Bissau encountered significant financial difficulties, highlighted by a R171 million ($9.4 million) loan default and insolvency by December 2023, when its liabilities surpassed its assets.

Going forward, MTN will focus its efforts on major West African markets such as Ghana, Cameroon, and Côte d’Ivoire, which collectively represented 19% of its total revenue for 2023.

In summary, MTN Group’s strategic divestment from smaller markets has proven beneficial through the profitable sale of its Guinea-Bissau unit, while the unfortunate loss from the Guinea-Conakry sale underscores the complexities in managing diverse market conditions. Moving ahead, the company is set to concentrate its resources on larger, more promising markets that better support its growth objectives.

Original Source: thecondia.com