MTN Group has decided to exit the Middle East region with the sale of its 75% stake in MTN Syria. This information was reported alongside its Interim Financial Results for the first half of 2020. MTN plans to sell this stake to TeleInvest which holds the other 25%. The South African network provider will then focus on its pan-African strategy.
“MTN has resolved to simplify its portfolio and focus on its pan-African strategy and will, therefore, be exiting its Middle Eastern assets in an orderly manner over the medium term. As a first step, we are in advanced discussions to sell our 75% stake in MTN Syria.” – Group President and CEO, Rob Shuter.
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MTN’s operation in the Middle East has been a bumpy ride. At a point, it was alleged to have bribed its way to receive a 15-year operational license in Iran. At another time, it was accused of violating the Anti-Terrorism Act and aiding militant groups in Afghanistan. The US sanctions also made it hard to repatriate cash from its Iran joint venture as a result of a crisis in the country. All these, coupled with the COVID-19 pandemic, had a severe impact on the business and let it to exit the region.
At the end of June, Middle East asset contributed less than 4% to the entire group EBITDA. MTN Syria contributed 0.7% to MTN’s reported EBITDA in the first half of 2020. The net assets attributable to MTN Syria in the MTN Group accounts have been written down to the estimated recoverable amount of US$80 million. Hence, the decision to shut down operations in Afghanistan, Yemen, and Syria. It also plans to withdraw its 49% minority shares in Irancell.
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