MTN Group achieved a gain of $15.8 million from the sale of its Guinea-Bissau subsidiary to Telecel, part of a strategy to focus on larger markets. The sale was approved in October 2023, with a binding agreement finalized by December 15, 2023. However, the disposal of MTN Guinea-Conakry resulted in a loss of $75 million, prompting MTN to refocus on markets that contributed significantly to its revenue.
MTN Group, Africa’s largest telecommunications operator, has reported a gain of R287 million ($15.8 million) from the sale of its Guinea-Bissau subsidiary to Telecel. This sale is part of MTN’s strategic divestment from smaller West and Central African markets as it seeks to streamline its operations and focus on larger, more profitable territories. These smaller markets collectively contributed just 7.3% to MTN’s revenue in 2023.
In October 2023, MTN accepted a binding offer from Telecel to acquire both MTN Guinea-Bissau and MTN Guinea-Conakry, for a nominal consideration of $1 each. The agreement was finalized on December 15, 2023, after these businesses were classified as held for sale as of December 31, 2023. Despite the gain from the Guinea-Bissau sale, the disposal of MTN Guinea-Conakry resulted in a significant loss.
MTN’s 2024 financial results indicated a loss of R1 370 million ($75 million) due to the disposal of MTN Guinea-Conakry, as the accumulated foreign currency translation reserve was reclassified to profit and loss. Additionally, MTN reported that there was no further impairment on the R171 million ($9.4 million) loan default that caused financial troubles for MTN Guinea-Bissau, leading to its insolvency when liabilities outweighed its assets.
Going forward, MTN will focus its operations on key West African markets such as Ghana, Cameroon, and Côte d’Ivoire, which collectively represented 19% of its revenue in 2023.
MTN Group’s recent sale of its Guinea-Bissau subsidiary reflects its strategic decision to focus on more profitable markets within Africa, following a restructuring of underperforming assets. While the sale yielded a small profit, the loss incurred from the Guinea-Conakry disposal underscores the financial challenges MTN faces in certain regions. Ultimately, the company aims to strengthen its position in more lucrative West African markets.
Original Source: thecondia.com
