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South Africa’s MTN Group said its plans to exit its investment in Iran are being hindered by US sanctions on the Middle Eastern nation.
“You cannot take money in and you cannot take money out,” making the group’s investment in that country “a frozen asset,” Chief Executive Officer Ralph Mupita told reporters at a briefing in Johannesburg on Friday. “Our strategy has been a full exit from the Middle East.”
The Johannesburg-based group holds a minority interest in Irancell, which is not under its operational control, while it sold its Afghanistan operations early last year. MTN is facing a US Department of Justice grand jury investigation into its conduct and that of its former unit in Afghanistan and Irancell.
Read: MTN Group, ZTE accused in US suit of aiding Iraq terror
MTN has not made provisions for the outcome of the probe because it does not involve financial claims, Mupita said.
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“There is no claim, so there is no provision or contingency,” Mupita said.
Read: MTN pushes for Iran growth in face of virus, sanctions
The company on August 27 said that it’s “respectfully defending cases brought against” it by plaintiffs in the US and “maintains that the plaintiffs have sued the wrong defendants in the wrong courts.”
Market consolidation
With operations in 16 countries cross Africa and the Middle East, its home market South Africa accounts for less than a third of the group’s revenue.
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Read: MTN sells Afghan unit to Beirut firm, in new Middle East exit
The South African market needs consolidation in infrastructure and telecoms operators because the profit pool is limited, Mupita said.
A decision by the country’s antitrust authorities to allow Vodacom to buy Remgro’s fibre assets “is a major inflection point,” he said.
Bloomberg reported on Thursday that MTN is considering reviving talks to acquire smaller South African rival Telkom SA, citing people familiar with the matter.
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