MTN Group reported a gain of $15.8 million from the sale of its Guinea-Bissau subsidiary and incurred a loss from the disposal of Guinea-Conakry. The company has classified both subsidiaries as held for sale to streamline its operations, focusing on more profitable West African markets.
MTN Group, the largest telecommunications operator in Africa, has sold its subsidiary in Guinea-Bissau to Telecel, realizing a gain of R287 million (approximately $15.8 million) in accumulated foreign currency translation reserves. This sale is part of MTN’s strategic decision to divest from smaller West and Central African markets, which contribute a minor 7.3% to the overall revenue of the group in 2023.
In October 2023, MTN received a binding offer from Telecel for its operations in both Guinea-Bissau and Guinea-Conakry, with a nominal value of $1 each. The agreement was finalized on December 15, 2023, after both subsidiaries were classified as held for sale by year-end.
While the sale of MTN Guinea-Bissau was profitable, the disposal of MTN Guinea-Conakry resulted in a significant loss. According to MTN Group’s 2024 financial results, an accumulated foreign currency translation reserve loss of R1 370 million (approximately $75 million) was recorded in relation to Guinea-Conakry.
The classification of Guinea-Conakry as held for sale indicated a net liability position, eliminating the possibility of further impairment on its valuation. Furthermore, MTN Guinea-Bissau was grappling with financial difficulties, highlighted by a loan default of R171 million (around $9.4 million) and insolvency declared in December 2023, marking liabilities that surpassed assets.
Moving forward, MTN Group plans to refocus its efforts on more lucrative West African markets such as Ghana, Cameroon, and Côte d’Ivoire, which together constituted 19% of the group’s revenue in 2023.
MTN Group’s strategic divestment from smaller markets culminated in significant financial transactions, resulting in a gain from the sale of its Guinea-Bissau subsidiary, juxtaposed against a loss from Guinea-Conakry. The organization aims to concentrate on more profitable West African regions to enhance its financial performance.
Original Source: thecondia.com
