MTN Group, Africa’s largest telecommunications operator, reported a gain of R287 million ($15.8 million) in accumulated foreign currency translation reserve (FCTR) following the sale of its Guinea-Bissau subsidiary to Mexican telecom firm, Telecel. This transaction aligns with MTN’s strategic divestment from smaller West and Central African (WECA) markets.
The sale, which received regulatory approval, is part of MTN’s broader initiative to streamline its operations and focus on larger, more profitable markets. Collectively, these smaller markets contributed only 7.3% to the group’s 2023 revenue.
In October 2023, MTN accepted a binding offer from Telecel for MTN Guinea-Bissau and MTN Guinea-Conakry, with a nominal consideration of $1 for each entity. The sale and purchase agreement was finalized on December 15, 2023, after MTN classified both businesses as held for sale as of December 31, 2023.
While the Guinea-Bissau sale resulted in a gain, the disposal of MTN Guinea-Conakry to the Guinean government incurred a loss. “On disposal of MTN Guinea-Conakry, an amount of R1 370 million ($75 million) accumulated foreign currency translation reserve (FCTR) loss was reclassified to profit and loss,” MTN Group’s 2024 financial results revealed.
“As a result of the net liability position for MTN Guinea-Conakry on classification of held for sale, there was no further impairment on measuring at the lower of carrying amount and fair value less costs to sell.”
MTN Guinea-Bissau faced financial challenges, including a R171 million ($9.4 million) loan default and insolvency in December 2023, when liabilities exceeded assets.
MTN will now concentrate on key West African markets, including Ghana, Cameroon, and Côte d’Ivoire, which accounted for 19% of its 2023 revenue.
