Fitch places MTN on Rating Watch Negative


Fitch Ratings has placed the ratings of MTN Group Limited (MTN), including the ‘BB+’ Issuer Default Rating (IDR), on Rating Watch Negative (RWN) following announcements that Nigerian authorities put forward USD10.1 billion of claims to the company related to alleged tax violations and illegal cash repatriations from the country.

The RWN reflects the risk of a potential spike in leverage and liquidity pressures if the company fails to resolve these disputes with the Nigerian government.

The size of the claims is significant and exceeds MTN’s total debt of USD6.7 billion at end-1H18. MTN has said that these allegations are
without merit and will be challenging these claims.

There is considerable uncertainty surrounding the regulatory developments in Nigeria. The potential impact on MTN’s credit profile is hard to predict.

Under certain scenarios in our analysis, MTN’s rating could be downgraded by one or more notches.

A lack of visibility in Nigeria could lead us to increase the weight of the Nigerian operating environment in our overall assessment of MTN’s rating.



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