Shareholders of MTN Nigeria Communications Plc are set to vote on Thursday on a proposed restructuring that will separate its financial technology business from its core telecommunications operations.
According to a regulatory filing on the Nigerian Exchange on Wednesday, the vote, scheduled as part of the company’s Annual General Meeting on April 30, centres on a related-party transaction that will see control of its fintech subsidiaries—MoMo Payment Service Bank Limited and Y’ello Digital Financial Services Limited—shift into a new holding structure backed by the parent MTN Group.
After bankrolling its fintech unit on its own, MTN Nigeria now needs outside capital to scale payments, remittances, and agent networks, making the separation a necessary step to unlock that next phase of growth.
Under the proposed arrangement, MTN Group, through its fintech investment arm, will inject ₦152.06 billion ($110.54 million) in exchange for a 60% stake in the fintech businesses.
MTN Nigeria will retain the remaining 40%. Both parties will then consolidate their interests under a new Central Bank of Nigeria-regulated holding company, formalising a shared ownership model.
By bringing in the parent company as a majority investor, MTN Nigeria effectively shares the funding burden while freeing up capital to reinforce its core network business.
The company said this would strengthen its balance sheet, improve efficiency ratios, and allow it to prioritise investments in connectivity and service quality.
KPMG independently assessed the deal and issued a fairness opinion on the agreed ₦95.5 billion ($69.43 million) valuation of the fintech businesses on a debt- and cash-free basis. According to MTN Nigeria, the valuation represents a 2.1 times premium to the units’ carrying value as of December 2025.
For shareholders, the company framed the transaction as broadly neutral in the near term but beneficial over time. Existing shareholdings in MTN Nigeria will remain unchanged, and investors will continue to have indirect exposure to the fintech business through the company’s retained 40% stake.
One immediate financial impact will be on reported earnings, according to the filing. The fintech subsidiaries are currently loss-making—a common feature for businesses at an early growth stage—but those losses will no longer be consolidated into MTN Nigeria’s financial results following the separation. This is expected to improve headline performance metrics, including EBITDA margins and free cash flow, MTN noted.
“MTN Nigeria will no longer need to commit as much funding to support the fintech subsidiaries, allowing it to further strengthen its balance sheet and allocate capital to drive growth in its core connectivity platform,” the company noted. “As a result, the company’s ability to pay dividends is expected to improve or, at the very least, remain stable.”
Beyond financial reporting, the separation is expected to simplify regulatory oversight. MTN Nigeria will remain under the supervision of the Nigerian Communications Commission. The fintech entities will operate under banking regulations, reducing compliance overlap and aligning each business with its respective regulator.
If approved, the transaction will proceed through regulatory and legal processes, with completion targeted by the end of 2026.
