MTN Group was under review by Moody’s for a possible credit rating downgrade after the South African mobile phone operator said it was being asked to pay a total of $10.1 billion by authorities in Nigeria, the ratings agency said on Thursday.
Africa’s biggest wireless phones group said on Tuesday the Nigerian Attorney General (NAG) was seeking $2 billion in taxes incurred over the last decade, days after an order from the Central Bank of Nigeria (CBN) that MTN’s Lagos-based unit hand over $8.1 billion that it said was illegally sent abroad.
“MTN’s ratings have been placed on review for downgrade to reflect the uncertainty around the potential implications of the recent CBN and NAG announcements on MTN’s credit profile,” Moody’s said.
MTN, whose debt stands at around 57 billion rand ($3.7 billion), has said the CBN’s allegations are without merit and it would hold talks with authorities to defend its position.
Moody’s, which already has junk rating on MTN debt at Ba1, said without the demand for the refund and the potential tax shortfall MTN would be able to repay approaching debt maturities over the next 12 to 18 months.
Reuters.
