MTN Said in Advanced Negotiations About Reducing $5.2 Billion Fine

MTN

MTN Group Ltd. is in advanced negotiations about reducing a record $5.2 billion penalty imposed by Nigerian regulators on Africa’s largest wireless operator, according to people familiar with the matter. The shares reversed earlier losses.

MTN will probably get a lower fine, which was imposed after the Johannesburg-based company failed to meet a deadline to disconnect 5.1 million unregistered subscribers, said one of the people, who asked not to be identified because the matter is private. It’s not clear by how much the regulator is willing to cut the penalty, the person said.

The mobile-phone company has until Nov. 16 to pay the levy, which is based on a charge of 200,000 naira ($1,005) for each unregistered customer. MTN Chairman Phuthuma Nhleko will lead the conversations with the Nigerian Communications Commission after Chief Executive Officer Sifiso Dabengwa resigned over the weekend. The company’s shares have lost almost a fifth of their value since the fine was made public two weeks ago.

MTN shares reversed earlier losses to gain 1.6 percent to 160.01 rand as of 11:49 a.m. in Johannesburg, giving the company a market value of 296 billion rand ($21 billion).

Dabengwa left after taking responsibility for the penalty, and Nhleko will act as executive chairman for a maximum of six months. Nigerian Communications Commission spokesman Tony Ojobo declined to comment.

Bloomberg