Shanduka Group Ltd, an investment company based in South Africa and led by Cyril Ramaphosa, has bought a $335 million stake in MTN Nigeria, which with over 45.6 million subscribers, is Nigeria’s biggest mobile operator.
The purchase was made through Shanduka’s Mauritian unit from three private investors including private- equity company African Capital Alliance. MTN, Africa’s biggest mobile-phone operator, still has an effective 78.8% of MTN Nigeria Communications Ltd.
Nigeria’s economy is expected to grow by 6.5% this year and in 2013. The International Monetary Fund (IMF) expects growth in sub-Saharan Africa to reach 5.7% in 2013, while South Africa will probably expand 3%. The deal is therefore as a move to tap into a promising market in Africa part outside South Africa, where growth rates are expected to exceed those in its home market, Shanduka Chief Executive Officer Phuti Mahanyele said.
“It’s a compelling story for us,” Mahanyele said. “Nigeria is the biggest telecoms market in Africa, surpassing South Africa. It’s an attractive destination and the density is at such a level that there is the opportunity for growth.”
Shanduka may consider an initial public offering of its stock at an appropriate time, Mahanyele said. The group “is still at the early stages of deciding what portion of the business we would list” and whether it would list the entire company or industry groups, such as its diversified resources investments, she said.
The company’s investments include coal, platinum, property, energy, telecommunications, fast foods and financial services.
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