It wasn’t as if South Africa-based, pan-Africa mobile services provider MTN Group (OTCPK:MTNOY) didn’t already have enough challenges, what with the company fighting for market share and margins with Vodacom (OTCPK:VDMCY)
in a weak South African economy, facing renewed sanctions on Iran, and
having some challenges in other operating areas. Now the situation has
gotten considerably uglier with the government of Nigeria looking to
take $10 billion from MTN for what it claims are underpayment of taxes
and violations of currency controls.
At this point
it is harder and harder to argue for patience with MTN Group. While new
management may be able to drive better long-term performance, and the
long-term potential of the African market (as a whole) is significant,
the issues with Nigeria and Iran are significant and won’t go away
quickly. MTN Group is likely trading below, if not well below, a
reasonable estimate of fair value, but the risks to the Nigeria business
are substantial and that creates significant overall uncertainty as to
valuation and long-term potential.
Continue here for the full article:
Nigeria Once Again Turning The Screws On MTN Group
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