[2008-08-27]  NSSF to Acquire Shares in MTN
The National Social Security Fund, NSSF is in negotiations to purchase shares in MTN Uganda, a leading telecommunications firm, Business Power has learnt. Information exclusively available to Business Power indicates that the Fund has already started preliminary negotiations with South Africa's MTN Group, the majority shareholder in MTN Uganda.

The talks are pretty much at a very primary stage, according to sources, but early indicators of a possible outcome appear positive.


NSSF has already set its minimum conditions for the deal, among which include a demand that MTN Group allows an external accountant to do a due diligence on MTN Uganda, provision of detailed information on MTN Uganda's administrative, financial and other core components of the company, and "confirmation that the transaction shall be on a direct sale of the shares by MTN South Africa itself and not through a third party."

MTN Uganda Chief Commercial Officer Eric Van Veen couldn't confirm or deny the impending acquisition of shares by NSSF when asked to comment on the secretive negotiations.

Mr David Chandi Jamwa, the managing director of NSSF agreed in an interview with Business Power that they were in talks to get shares in MTN Uganda.

"We are still carrying out a due diligence on the company and shall let you know what follows," Mr Jamwa said recently. He refused to shed more light on several other aspects of the deal on which details are scanty. It's not clear how much equity NSSF wants to acquire in MTN but it's highly unlikely that it will be a controlling stake as the Fund might not afford to throw so much money at a single investment.

If the deal follows through though, it could potentially be one of NSSF's greatest investments. MTN Uganda is possibly Uganda's largest company by revenue and its future looks luminous with Uganda's mobile subscriber base growing at a good rate. The company has been named Uganda's largest taxpayer for two consecutive years. The investment is seen as a continuation of a new strategy by NSSF to expand its investment in Uganda's corporate world, in part to achieve a more reasonable balance of its asset portfolio.

Earlier this year, NSSF bought a 20 per cent stake in the hyper-deluxe Serena Hotel, which is perhaps expected to turn out to be one of the most profitable hotels in the country. At the USE, NSSF holds 26 per cent of Uganda Clay's entire shareholding, 5.9 per cent of Dfcu, 2.7 per cent of Stanbic and 1.5 per cent in Bank of Baroda. The Fund also has a 50 per cent ownership of Housing Finance Bank where it intends to pump an additional Shs10 billion through the company's corporate bond listed on the USE.

Much of the Fund's investment portfolio has traditionally been biased toward real estate and other fixed income assets.

Of late though, the Fund is deploying its capital to high-return but risky portfolios like foreign exchange and stock markets.

The MTN-NSSF deal also now casts in limbo the long running talk of MTN Uganda listing on the Uganda Securities Exchange, as a way of enabling Ugandans who have certainly contributed to its success, share in its profitability.

Although MTN had initially appeared to lend credence to such talk, if unenthusiastically, they have lately seemed cold to the idea and there has not been any public comment from any MTN official on the matter in the last half a year or so.


Source: Allafrica