MTN Group announced on Thursday it had initiated an exit of Syria, by abandoning the operation given the regulatory actions and demands that make operating in the market untenable.
“We reserve our right to seek redress through international legal processes given the actions of the Syrian authorities that have left us with no other choice than to exit,” the company said in a financial results note to investors.
MTN said in the first quarter Syria operation represented less than 1% of MTN Group EBITDA, before deconsolidation in February 2021.
On 25 February 2021, the Administrative Court of Damascus placed MTN Syria under judicial guardianship, appointing the chairman of TeleInvest (the non-controlling shareholder of Syria operation) as the judicial guardian with the responsibility for managing MTN Syria’s day-to-day operations.
“The appointment of the judicial guardian significantly reduced the Group’s ability to direct relevant activities in MTN Syria and therefore the Group lost control over MTN Syria on this date,” MTN said.
“On loss of control, MTN Group recognised its 75% shareholding in MTN Syria as a financial instrument at fair value.
“Given the appointment of the judicial guardian and the related shift of power from the majority shareholder to the judicial guardian, the fair value of the shares was determined to be negligible. Subsequently, the group has decided to initiate a process to exit Syria”
MTN Group is selling its 75% stake in MTN Syria as part of its strategy to exit the Middle East in an orderly manner.
The company informed investors that it was focusing its strategy in future on the African markets:
“As part of our ongoing portfolio review, we believe the group is best served to focus in the future on our pan-African strategy,” said Rob Shuter, MTN CEO.
“We will therefore be exiting the Middle East 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.”
MTN added: “Exploration of the options to exit Yemen and Afghanistan in an orderly manner is ongoing and we will keep the market updated as the processes develop.”