MTN said to have moved money out of Iran

Johannesburg - MTN

Group, the South African wireless carrier that’s been trying to repatriate $1

billion from Iran, has managed to extract several hundred million dollars from

the country with the help of European banks, according to people familiar with

the matter.

With a number of

money transfers now completed, MTN expects to bring the entire sum home by the

end of the first quarter, said the people, asking not to be named because the

information isn’t public. The stranded cash includes a $430 million loan

repayment from the 49 percent owned venture MTN IranCell Telecommunication Company

Services, as well as dividends accumulated in Iran over five years.

The cash buys

MTN added flexibility as it revamps its top management, and marks a step toward

normalization of its business in Iran, where US-led sanctions had prevented the

company from reaping the fruits of a thriving venture. While Iran is one of

MTN’s most important markets, frictions with the U.S. could resurface at any

time, a concern exacerbated by the possibility of policy changes under

President-elect Donald Trump.

Trump’s election

“puts an unknown into the mix,” said Peter Takaendesa, a money manager at

Mergence Investment Managers in Cape Town. Takaendesa said. “It would be good

for shareholders if MTN could get the money out sooner rather than later.’’

The shares rose

as much as 1 percent and were up 0.7 percent at R123.7 at 10:42 a.m. in

Johannesburg.

MTN is confident

that it will be able to continue repatriating dividends from Iran in the

future, even if the change in administrations, scheduled for Jan. 20, affects

the political climate, one of the people said.

An MTN

representative declined to comment on the repatriation of funds from Iran.

The company has

been trying to take the money out of Iran since April, after US-led

international sanctions were lifted earlier in the year. But a lack of ties

between Iran and international banks slowed the process. The transfers started

flowing in October, after unnamed banks began assisting the carrier in moving

the funds, the people said.

Iran, MTN’s

third-largest market, could soon overtake Nigeria as number 2 as the company’s

growth in the Middle Eastern country accelerates and the Nigerian currency

slumps, said one of the people. Iran now contributes about 10 percent of

earnings, according to its latest financial report.

Read also:  MTN complied with Nigeria's law

The Iran money

also helps MTN’s cash position after it agreed to pay a 330 billion naira ($1

billion) fine to the Nigerian government this year for missing a deadline to

disconnect customers.

As part of its

push in Iran, MTN in October agreed to invest 20 million euros ($22 million)

that will go toward the country’s first cab-hailing smartphone application,

Snapp.ir. E-commerce is projected to grow to a value of $20 billion by 2018 in

the Middle East and MTN plans to particularly invest in the retail and travel

sectors, MTN Chairman Phuthuma Nhleko said in the company’s annual report.

Sanctions

against Iran were lifted in January after inspectors certified that the country

curtailed its nuclear program as promised under a 2015 agreement with world

powers. MTN gained its Iran license in 2005.

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