MTN Group, Africa’s leading telecommunications company by subscriber count, has successfully completed the sale of its subsidiary in Guinea-Bissau to Mexico-based Telecel.
This transaction, which received the necessary regulatory approvals, aligns with MTN’s strategic plan to divest from smaller markets in West and Central Africa, which collectively accounted for only 7.3% of the company’s 2023 revenue.
Previous Agreement and Financial Challenges
In October 2023, MTN received a binding offer to sell both its Guinea-Bissau and Guinea-Conakry subsidiaries for a symbolic $1 each. Subsequently, on December 15, 2023, MTN and Telecel entered into a sale and purchase agreement, pending regulatory approval.
MTN Guinea-Bissau had encountered financial difficulties, including the breach of a R171 million ($9.3 million) loan from an undisclosed lender.
By December 2023, the subsidiary became insolvent, with liabilities of R802 million ($43.6 million) exceeding assets of R619 million ($33.7 million).
Smooth Transition and Future Focus
MTN has assured stakeholders that it has taken measures to ensure a smooth transfer of ownership, which the company believes serves the best interests of all parties involved and the telecommunications sector in Guinea-Bissau.
Moving forward, MTN plans to concentrate its efforts on larger West African markets, such as Ghana, Cameroon, and Cote d’Ivoire, which contributed 19% of the pan-African telco’s revenue in 2023.