MTN Nigeria plans to list on the Nigerian Stock Exchange.  I have done the numbers, and if the rumors remain, the stock would be cheap.  Yes, using numbers on what is happening on the sale of 9Mobile, I do think MTN Nigeria would be good for investors.  Here are the two techniques, relying largely on public information.

Method A: Using 9Mobile Value to Extrapolate

9Mobile is considering selling itself for $500 million which means the value is about $1 billion since the buyer would assume about $500 million of debts. This is still overly optimistic until the deal closes [yes, we cannot take it for granted that 9Mobile deal is done until the buyer pays].

On Thursday, PREMIUM TIMES reported that two of the interested bidders, Teleology Holdings Limited and Smile Telecoms Holdings, were submitted to the NCC as the selected preferred bidder and reserved bidders respectively on the recommendation of Barclays Africa, the transaction financial adviser appointed to monitor the sale of the company.

While Teteology made an offer of $500 million, Smile Telecoms reportedly offered $300 million, with their status subject to NCC’s final confirmation.

Teteology was however given 30 working days within which to pay the offer or forfeit its position to the reserve bidder. The deadline for the payment is expected to lapse sometime in the middle of March.

So, if 9Mobile which has about 17 million users command about $1 billion, MTN Nigeria with nearly 57 million users should command around $4 billion. I have taken the intrinsic value of the market positioning of MTN Nigeria when compared with 9Mobile. In other words, a user in MTN Nigeria brings more value than 9Mobile. So, largely, we can say that MTN Nigeria is worth about $4 billion.

According to the Guardian, MTN Nigeria would list around June 2018.

In Nigeria, MTN has set a June 2018 deadline for its IPO which is expected to be the biggest on the Nigerian Stock Exchange (NSE). The decision to list on the NSE was reached in June 2016 during negotiations on the industry record fine slammed on the operator after it failed to disconnect unregistered subscribers from its network as directed by the Nigerian Communications Commission (NCC).

The NCC recently disclosed that MTN has only paid one-third (N110bn) of the sum (N330bn). Regional media have reported that the company could raise at least N153bn through the local bourse – although the operator has refused to confirm this

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Bloomberg reported that Standard Bank Group and Citigroup are advising MTN on selling 30% of MTN Nigeria on the NSE.

So, if MTN Nigeria should sell 30% of its value and MTN Ghana sells 38% and both generate $1 billion, I would see that as a discount. Let us assume that MTN Ghana brings in $300 million while MTN commands $700 million. Using that we can say that 30% of MTN Nigeria is $700 million. (Bloomberg noted $500 million for 30% though that was not the most current number on this).

But from 9Mobile sale price (not certain until it is done), I had modelled 30% of MTN Nigeria to command $1.2 billion. So, if they are going for $700 million, it means MTN Nigeria is coming at a big discount. If that is the case, investors would go for it.

Method B: Using MTN Group User Base

MTN Group has a market capitalization of $17 billion (around 244 billion rand).

About 33% of MTN Group revenue comes from Nigeria. Also, Nigeria commands more than 25% of its total subscriber base.  Largely, Nigeria is perhaps the most profitable market for MTN Group. If you take the subscriber base alone, you can put MTN Nigeria at a market cap of $4.25 billion (25% of the $17 billion). By the time taxes are taken, the value of MTN Nigeria can down as $4 billion.

All Together

So, MTN Nigeria is worth $4 billion. If they sell 30% for $500 million-$700 million, it is coming at a big discount. That makes it a BUY.  I do believe that if there would be 1-2 telecom operators that would survive anything in Nigeria (WhatsApp, satellite Broadband, etc), MTN Nigeria would be among.

My secondary school alma mater, Secondary Technical School Ovim (Abia State), today informed me that it would like to rename one of the Inter-Houses to my name. It has five Houses – Red, Green, White, Yellow and Blue. Essentially, during the annual Inter-House Sports competitions, one of the Houses would be Ndubuisi Ekekwe House. Unlike the chieftaincy title, I accepted this one. The letter was written by the school principal on behalf of the staff, students and the PTA.

Secondary Technical School Ovim is a community school. It was established by Ovim Community as one of the foremost technical secondary schools in eastern Nigeria. The Motor Vehicle Lab, Wood Work Lab and other labs remain some of the best in the state. In short, the new computer lab is used by Abia State University for lab works.

This is not anyhow school – community sons like Rear Admiral Ndubuisi Kanu (rtd) [former governor of Lagos State], Major General Ike Nwachukwu (rtd) [former governor of Imo State], Lt General Ihejirika Azuibuike (rtd) [ former Chief of Army Staff] are some of the icons that invest efforts to make sure our school remains strong.

The school is largely managed by Ovim Community League – a community development entity. We are recording high double-digit percentage on transition from secondary to university education. They have accomplished impressive number on primary education to secondary education. Largely, any child in my village is guaranteed of secondary education.

I attended this school. I became a local legend, breaking and holding all-time WAEC academic result in the school history. I also became a teacher while a student teaching Maths, Physics and Further Maths. I won laurels for my school in competitions across the nation. After my WAEC, my principal and vice principal received State Awards.

The last time I visited home, primary school kids were brought by their parents for me to help them with algebra, numbers, etc. And the bigger boys and girls in secondary school came with Geography map reading, Calculus and Physics.

It makes you humble that you are inspiring young people. I would likely attend the next Inter-House Sports Competition, not to cheer those competing from Ndubuisi Ekekwe House but all kids in our school. Ovim is a very small community (about 10,000 people) but we are enviable in our quest to build a society for all. I benefited from the efforts of those ahead of me – they brought the best teachers in Nigeria to teach me. We would keep that tradition going. I am indeed honored.

Our AgTech pioneer, Zenvus, moves to the next phase of the Katerva Award which was referred by Reuters as “the Nobel Prize for Sustainability”.

Zenvus is a pioneering precision farming technology company that uses computational algorithm and electronics to transform farms. Zenvus collects soil fertility data and crop vegetative health data, concatenating them with AI to deliver precision agriculture at scale. It then uses the aggregated and anonymized data to deliver financial services to farmers. Zenvus can support any size of farms, from small to the largest farms.

The Katerva Award is the pinnacle of global sustainability recognition. Through them, the best ideas on the planet are identified, refined and accelerated toward impact at a global level.

Katerva isn’t looking for ideas that will improve the world in small increments. We are looking for game-changers and industry breakers; ideas that leap efficiency, lifestyle, consumption and action a generation ahead of current thinking. Single-digit percent change isn’t enough. We’re looking for triple-digit and beyond. We’re looking for what are truly the most promising and impactful ideas!

Katerva Award is managed by Thomson Reuters Foundation and Indiana University.