Investors

Terms and Conditions of the Offer

The following defined terms in Section 4 (Definitions) are used in this Section 18 and are reproduced below for ease of reference:

 “Applicant” means a legal entity or natural person who applies for Offer Shares in accordance with the process set out in this Prospectus, and includes a Qualifying Applicant; 

 “Application” means an application for Offer Shares submitted through the m-IPO Platform, the USE Easy-Portal or the Application Form;

 “Closing Date” means 22 November 2021, being the last day for acceptance of Applications for the Offer Shares, or such other date as may be amended by the Selling Shareholder;

 “East African” means a natural person who is a citizen of an East African Community Partner State or a corporate entity incorporated under the laws of, and domiciled in, any East African Community Partner State;

 “Eligible MTN Customer(s)” means a MTN Customer who is a natural person whose NIN and registration details have been verified against the NIRA database and in respect of whom a copy of the national identity card issued by NIRA is maintained in the MTN customer database;

 “Foreign Investors” means Retail Investors and Professional Investors who are not Ugandan or from other East African countries;

 “Incentive Shares” means, as determined pursuant to the terms and conditions in Section 18.9 (Incentive Shares) of this Prospectus, the number of the Offer Shares made available by the Selling Shareholder and proposed to be transferred at nil cost to eligible categories of Ugandan and East African Retail Investors and Uganda and East African Professional Investors as an incentive to encourage such investors to apply for more Offer Shares;

 “m-IPO Platform” means the channel through which Eligible MTN Customers can open a SCD Account and apply for Offer Shares using either the USSD Code *165*65# or the MyMTN App, as more particularly described in Section 18 (Terms and Conditions) of this Prospectus;

 “Opening Date” means 11 October 2021, being the first day for acceptance of Applications for Offer Shares;

 “MTN Customer” means a natural or artificial person with a validly registered and verified MTN SIM-card;

 “NIN” means a national identification number issued by NIRA;

 “Oversubscription” means an occurrence where the aggregate number of Applications for Offer Shares is greater than the Sale Shares determined by the Selling Shareholder to be available to be sold and delivered to Applicants at the

Offer Price, and following which the Selling Shareholder will allocate the Sale Shares and the Incentive Shares on a basis that addresses oversubscription as described in more detail in Section 18.7 (Allocation Policy) and Section 18.9 (Incentive Shares);

 “Professional Investor” means a Qualifying Applicant whose ordinary business or regular activity or investment objective involves the buying and selling of securities as principal or a fiduciary agent, and includes an underwriter, a bank, an insurance company, a fund manager, a broker, broker’s representative, a dealer, dealer’s representative and an investment adviser;

 “Qualifying Applicant” means a person who completes and submits an Application in accordance with the terms of this Prospectus and provided such person is: (a) a natural person who is 18 years or older (applying on his/her own behalf or on behalf of a minor); who is not located in the United States and who is not located in nor a national, resident or citizen of another Restricted Jurisdiction or (b) is a corporation, partnership or other unincorporated association which is incorporated, set up, established or resident in any jurisdiction (except a Restricted Jurisdiction), provided that such person (by applying for the Offer Shares) is not in contravention of any law applicable to him/her/it;

 “Retail Investor” means a Qualifying Applicant who is not a Professional Investor;

 “Sale Shares” means the number of Offer Shares which the Selling Shareholder determines ought to be allocated to a successful Applicant at the Offer Price, pursuant to the terms and conditions in Section 18.8 (Sale Shares) of this Prospectus, and which allocation may or may not result in a cash refund pursuant to Section 18.6.6 (Refund of excess Application funds);

 “Ugandan” means a natural person who is a citizen of Uganda or a corporate entity incorporated under the laws of, and domiciled in, Uganda and in respect of which the direct or indirect controlling (over 50%) economic, ownership, voting or decision-making interest is held by a Ugandan citizen(s) as shall be affirmed by a statutory declaration to this effect or any other additional documents as may be required by the Selling Shareholder and the Transaction Adviser; and

 “USE Easy-Portal” means the online portal administered by USE that allows Applicants to apply for Offer Shares, open SCD Accounts and view those SCD Accounts.

Times and Dates of the Opening and Closing of the Offer

The Offer will open at 10.00 a.m. on 11 October 2021 and will close at 4.00 p.m. on 22 November 2021. The Offer Period is subject to amendment and extension if proposed by the Selling Shareholder and consented to by the CMA and the USE. Any such amendment or extension will be announced publicly through a press statement.

Particulars of the Offer

An offer of 4,477,808,848 Offer Shares is being made at a price of UGX 200 per Offer Share, payable in full on Application upon the terms and conditions set out in this Prospectus.

The Offer Shares constitute 20% of the issued share capital of the Company, which, assuming that the Offer Shares are taken up in full, meets the USE Listing Rules requirement that immediately following the successful completion of the Offer, at least 20% of the Shares are held by public shareholders, and the public shareholders must at the very least be 500 in number.

The funds raised through the Offer will accrue to the Selling Shareholder, net of related expenses.

Applications for Offer Shares are irrevocable and may not be withdrawn once received.

Oversubscription will result in Applicants not necessarily being allocated all of the Offer Shares for which they applied. Please refer to the Allocation Policy in Section 18.7 (Allocation Policy) of this Prospectus.

The Selling Shareholder reserves the right to accept or reject any Application, either in whole or in part, or to accept some Applications in full and others in part, in such manner as it may determine in its sole and absolute discretion. Without limiting this discretion, the following will likely disqualify an Applicant:

  1. if you do not make payment for the full quota of Offer Shares applied for in time and in accordance with this Prospectus;
  2. if your Application is not completed properly or is incomplete;
  3. if you do not apply for the minimum number of Offer Shares referred to under Section 3 (Minimum Individual and Aggregate Application) of this Prospectus;
  4. if your Application and payment in full in respect of the Offer Shares applied for is not received by 4:00m. on the Closing Date;
  5. if all the required supporting documents to your Application are not submitted;
  6. if any information in your Application cannot be verified for know-your-customer or anti-money laundering verification due diligence purposes;
  7. if you are not a Qualifying Applicant; or
  8. if you make any false or untrue statements in your Application.

An announcement regarding the results of the Offer and the basis on which allocations were made will be published by 3 December  2021, which date is subject to amendment in the event that the Offer Period is altered by the Selling Shareholder.

Application has been made to the USE for the listing of all the 22,389,044,239  issued Shares of MTN on the Main Investment Market Segment of the USE. Admission to the Official List of the USE is expected to become effective on 6 December 2021. Funds paid in respect of any Application accepted will be returned if the Listing does not become effective.

Minimum Individual and Aggregate Application

The minimum number of Offer Shares for which Application must be made is 500 Offer Shares. Applications for greater than this minimum must be in multiples of 500 Offer Shares with no limit on the number of Offer Shares that an Applicant can apply for.

The Selling Shareholder may suspend the Offer and refund all funds received from Applicants in the event that aggregate Applications for Offer Shares representing at least 25% of the Offer (approximately 1,119,452,212 Offer Shares) are not received. In taking this course of action, the Selling Shareholder will consult with and seek the consent of the CMA and the USE.

The USE Listing Rules require that immediately following the Offer, at least 20% of the Shares shall be held by not less than 500 shareholders excluding directors and employees. In the event that the minimum float and the minimum number of public shareholders is not achieved, a waiver of the USE Listing Rules requirement regarding the minimum float or the minimum number of public shareholders (as applicable) may be sought from USE to proceed with the Listing notwithstanding the shortfall.

Lock-in Period

Existing Shareholders shall not participate in the Offer.

Pursuant to the Lock-in Agreement, MTN International, Charles Mbire, and the Directors (to the extent that any Director holds Shares in the Company) have agreed not to dispose of or further encumber any of the Shares they respectively hold in MTN for a period of 12 months commencing on the Listing Date. The Lock-in Agreement includes customary exceptions relating to disposal of shares pursuant to a court order, to an associate of the Existing Shareholder, to alleviate financial hardship or in the event of death or insolvency of the locked-in party.

In addition, the Company has agreed not to create, issue or offer for subscription new Shares for a period of 12 months commencing on the Listing Date.

Where to Obtain a Prospectus and Application Form

In line with MTN’s vision to lead the delivery of a bold, new, digital world and as part of its drive for responsible and sustainable use of environmental resources and management of environmental impact for sustainability, the Offer is a “green” issue in which the Application and allotment processes will be conducted, to the extent legally and practically possible, electronically.

Therefore, the Prospectus is available by electronic download at the following link: https://www.mtn.co.ug/investors.

Application Forms are available as set out in Section 18.7 below.

A toll-free helpline number 0800-250-250 and email tps@stanbic.com and info@use.or.ug have been established to support potential investors with the Application process.

 Application Procedure

Only Qualifying Applicants can apply for the purchase of the Offer Shares. A Qualifying Applicant may apply to purchase Offer Shares in the following three ways:

  1. electronically by using the m-IPO Platform. This option is limited to Eligible MTN Customers using MTN Mobile Money as the payment channel; or
  2. electronically by accessing USE Easy-Portal at https://scd.use.or.ug/. This option is available to Applicants on a self-service or assisted basis. Assisted USE Easy-Portal applications involve provision of guidance by an Authorized Selling Agent to an Applicant in populating and submitting an Application on the USE Easy-Portal; or
  3. in the event that an Applicant has no access to the options listed above, an Applicant can apply for the Offer Shares by completing and submitting the physical Application Form to any Authorised Selling Agent by physical or electronic means.

Pursuant to the Uganda Securities Exchange Fees, Charges and Penalties Rules 2021, an applicant for shares in an initial public offer  must pay a processing fee of UGX 5,000. Although this fee should, in the ordinary course, be paid by each Applicant, MTN will pay this processing fee on behalf of all Applicants.

Details on how to apply using these channels are as set out in this section.

How to apply – m-IPO Platform

The option to apply for Offer Shares using your mobile phone is limited to Eligible MTN Customers. The Application process may be completed by dialing *165*65#, or by using the MyMTN App, which is available for all MTN smartphone subscribers. The MyMTN App may be downloaded for free from mobile applications stores such as Apple Store (iOS) or Google Play (Android).

The USSD channel and the MyMTN App are both enabled to accommodate opening of SCD Accounts and Application for Offer Shares. Eligible MTN Customers without an SCD Account will be required to open an SCD Account prior to applying for Offer Shares.

For Eligible MTN Customers that already have an SCD Account, the below process will have to be followed to submit an Application:

  1. dial *165*65# or open the MyMTN App on a mobile phone device;
  2. select the “Uganda Securities Exchange” option and enter a valid SCD Account number;
  3. once the SCD Account number is validated, the Applicant will be prompted to select an Authorised Selling Agent and to enter the number of Offer Shares to be purchased and the amount to be paid therefor; and
  4. the Applicant will authorise the transaction by submitting their MTN Mobile Money personal identification number.

Upon completion of the steps detailed above, the Application will be submitted. The Applicant will receive a text message containing the unique Application identification number.

Payments made via MTN Mobile Money will be subject to the MTN Mobile Money terms and conditions prevailing as of the date of this Prospectus. In addition, a daily transactional limit of UGX 5 million will apply, in line with the terms and conditions applicable to MTN Mobile Money.

How to apply – USE Easy-Portal

 An Applicant can apply for the Offer Shares by completing and submitting an Application on the USE Easy-Portal. The process below will have to be followed to submit an Application:

  1. access USE Easy-Portal web-page https://scd.use.or.ug/;
  2. enter valid USE Easy-Portal log-in credentials. In the event that the Applicant does not have an existing USE Easy-Portal account, click the link to “Create an account” and follow the prompts;
  3. once successfully logged into a USE Easy-Portal account, click the Offer Application button and populate the required fields, which include the designated Authorized Selling Agent, number of Offer Shares to be purchased, payment reference number and preferred refund channel; and
  4. click the “Submit” button at the bottom of the web-page.

Upon completion of the steps detailed above, the Application will be submitted. The Applicant will receive a text message containing the unique Application identification number.

On request by an Applicant, any of the Authorised Selling Agents listed as a broker/dealer in Appendix C, can assist the Applicant to complete and submit Applications on a dedicated broker interface on the USE Easy-Portal.

How to apply – submission of Application Form

Application Forms can be obtained from any Authorised Selling Agent. A sample Application Form is provided in Appendix A to this Prospectus.

Persons wishing to apply for Offer Shares must complete the Application Form and return it to any one of the Authorised Selling Agents listed in Appendix C of this Prospectus, via the email address indicated against each Authorised Selling Agent or by physical submission, by 4:00 p.m. on 22 November 2021.

In addition, in order for an Applicant to receive an allocation of Offer Shares, they must have an SCD Account. Applicants who already have an SCD Account should complete the Application Form and include the SCD Account number in the slot boxes provided and proceed with the process.

If an Applicant does not have an SCD Account, the Applicant must first open an SCD account using any of the options listed in Sections 18.7.7 to 18.7.10 of this Prospectus.

Counterfoils torn from the bottom of Application Forms will be issued to Applicants as receipts. All Applications received from a single Applicant will be aggregated and be treated as a single application in terms of the Offer.

All alterations on the Application Form, other than the deletion of alternatives, must be authenticated by the full signature of the Applicant(s).

The Selling Shareholder reserves the right to accept any Application, in whole or in part, even if the Application is incomplete or incorrectly completed.

Applicants are not allowed to apply for Offer Shares in a nominee capacity and must disclose the names and address of their principals and the number of Offer Shares applied for on behalf of each principal.

Applications may be made in the names of the executor or administrator of the estate of a deceased person or a guardian of a minor. The capacity of such Applicant should be indicated on the Application Form.

Applicants may be required to provide evidence of their authority or capacity to sign an Application Form.

Payment Terms

Each Application submitted must be accompanied by payment of an amount equivalent to the aggregate price of the number of Sale Shares applied for by the Applicant. Payment may be in the form of:

  1. if applying via an Application Form or the USE Easy-Portal, cash deposit into the account of a Receiving Bank or Authorised Selling Agent, as designated;
  2. MTN Mobile Money if applying through the m-IPO Platform;
  3. a valid bankers draft/cheque drawn on a commercial bank licensed in Uganda in favour of the MTN Offer Share Account for applications made using an Application Form;
  4. electronic funds transfer or real time gross settlement transfer to the bank account of an Authorised Selling Agent, as designated, if using an Application Form;
  5. any other recognised means of payment to the account of the Authorised Selling Agent or the Receiving Bank, as designated, if using an Application Form; and
  6. for Professional Investors, an irrevocable on-demand bank guarantee from a commercial bank licensed in Uganda, in the format required by the Selling Shareholder and valid for up to 30 days after the Closing Date.

Payments made via MTN Mobile Money will be subject to the MTN Mobile Money terms and conditions prevailing as of the date of this Prospectus. In addition, for payments made via MTN Mobile Money, a daily transactional limit of UGX 5 million will apply, in line with the terms and conditions applicable to MTN Mobile Money. The fees for payment via the m-IPO Platform have been waived.

If any draft or cheque accompanying an Application is dishonoured or not paid on first presentation, such an Application will be treated as being invalid. The Applicant shall be responsible for any losses and all costs incurred as a result.

The use of a bank guarantee is only permitted for Professional Investors. Professional Investors will not be required to provide direct payment on application. Payment for the Offer Shares applied for by Professional Investors will be made upon allocation and in any event within two working days of the announcement of allocation results. By submitting an Application Form, each Professional Investor binds itself irrevocably to the Selling Shareholder to pay in full the value of Sale Shares allocated to that Professional Investor.

Late Applications

Applications that are submitted beyond the stipulated submission time will not be accepted. Neither the Selling Shareholder, MTN nor any of their advisers or agents in relation to the Offer shall be under any liability whatsoever should an Application fail to be delivered/received by 4:00 p.m. on the Closing Date. Applications which are received after the Offer Closing Date will not be processed or considered. Late Applications will only be received on an exceptional basis where reasonable or justifiable cause is shown and in the Selling Shareholder’s sole discretion.

Refund of excess Application funds

If any Application is not accepted or is accepted for fewer Offer Shares than applied for as determined by the Selling Shareholder pursuant to the terms and conditions in Section 18.8 (Sale Shares) of the Prospectus, the balance of the amount paid on the Application will be refunded without interest with effect from 3 December 2021 (the date of announcement of the Offer allocation results). Refunds will be completed within 14 calendar days of 3 December 2021 and will be made on the following terms:

  1. in the case of Applications submitted through the m-IPO Platform, to the affected Applicant via the MTN Mobile Money account from which the amount paid for the Offer Shares applied for was drawn;
  2. in the case of Applications submitted through the USE Easy-Portal, to the affected Applicant via the refund channel nominated while populating the Application; and
  3. in the case of Applications made by the Application Form, to the bank account nominated by the Applicant for that purpose in the Application Form.

If the amount of the Application divided by the Offer Price does not result in a whole number of the Offer Shares, only the number of allocated Offer Shares that are rounded down to match the Application amount will be accepted. The unutilised amount will be refunded to the Applicant.

No refunds will be made to any person not named on an Application even where such person has made payment for the Offer Shares applied for in such Application.

Any refunds will be remitted by the Lead Receiving Bank within 14 calendar days following the date of announcement of the results of the Offer and the basis of allocation. No interest will be payable on amounts paid at the Application stage or on the refunded amounts.

SCD Account requirement

The Company’s Shares shall be held in dematerialised form by which, in accordance with the SCD Act, evidence of ownership of shares listed by a company on an authorised stock exchange shall be through a book-entry accounting record that is reflected on an electronic account (the SCD Account) opened and operated by the respective shareholder. No physical or paper certificates shall be issued as evidence of ownership of Shares in the Company.

In order for an Applicant to receive an allocation of Offer Shares, the Applicant must have a SCD Account. Applicants who already have an SCD Account should indicate their SCD Account number when prompted and proceed with the Application process. If an Applicant does not have a SCD Account, they must complete the SCD Account opening process using one of the below channels:

  1. the m-IPO Platform as detailed in Section 18.6.8 below;
  2. USE Easy-Portal https://scd.use.or.ug as detailed in Section 18.6.9 below; or
  3. through an Authorised Selling Agents as detailed in Section 18.6.10
How to open SCD Account – m-IPO Platform

Below are the steps to be followed to set up the SCD account:

  1. dial *165*65# or open the MyMTN App on a mobile phone device;
  2. select the option to create an SCD Account and enter a valid NIN;
  3. once the NIN is validated and it is confirmed that no SCD Account exists for this NIN, the Applicant will be requested to select an Authorised Selling Agent listed as a broker/dealer in Appendix C;
  4. upon selection of an Authorised Selling Agent, the Applicant will be prompted to review and accept applicable terms and conditions; and
  5. the Applicant will consent to the creation of the SCD Account by submitting their MTN Mobile Money personal identification number.

Shortly after completion of the above process, a unique Application identification number will be generated, and upon validation, an SCD Account will be created, and associated details communicated to the Applicant via a text message.

How to open SCD Account – USE Easy-Portal

Access the USE Easy-Portal at https://scd.use.or.ug.

For new users without a registered account, follow the instructions on the webpage to create a new USE Easy-Portal account, by submitting a name, email address and password.

For registered USE Easy-Portal users without a SCD Account, click the “Link / Create SCD Account” button and follow the instructions as prompted. The SCD Account application form requires bio data, contact information, broker information and bank information for payments. Once the form is submitted, the SCD Account information will be communicated to the Applicant via a text message.

 How to open SCD Account – Authorised Selling Agent

An Applicant may open an SCD Account through an Authorised Selling Agent listed as a broker/dealer in Appendix C. The Applicant will be required to complete the appropriate SCD Account opening form and the broker’s know-your-customer form. The know-your-customer form will enable the broker to open an SCD Account for the Applicant.

Applicants may choose to apply through the available online channels of certain Authorised Selling Agents. Those Authorised Selling Agents will provide soft copies of the SCD application form and the Authorised Selling Agents’ know-your-customer forms.

SCD Account application process for individuals
  • Submit a duly completed and signed Securities Account Opening Form SCD 1a together with a copy of a valid identification documentation (national identification card for Ugandans and passport for foreigners).
  •  Submit three recent colour passport size photographs.
  •  For joint accounts, each signatory will be required to submit a duly completed and signed SCD Form 1a; a copy of the valid identification documentation and three
  •  Recent colour passport size photographs.
 SCD Account application process for organizations, corporates, associations or other entities
  • Submit a duly completed and signed Securities Account Opening Form SCD 1b together with a copy of the identification documentation for all its signatories or directors or officers authorised to give instructions on the account and supporting documentation for such authority.
  •  Only three signatories or directors or officers will be authorised to give instructions.
  • Submit three recent colour passport size photographs of each signatory or director or officer authorized to give any instructions on the account.

The Authorised Selling Agents will provide soft copies of the SCD 1a (for individuals) and SCD1b (for organisations) forms, the Application Form and the selling agents know-your-customer forms.

Know-your-customer information required from organisations shall include the following:

  • Certificate of incorporation or registration.
  • Memorandum and articles of association.
  • Resolution to open account with details of signatories and their designation.
  • For companies, resolution should be signed jointly by two directors or jointly by one director and the company secretary.
  • National identification card or valid passport copies and photos of all signatories.
  • Proof of residential address of all signatories (a letter from the entity with this information is sufficient. Other options are copies of utility bills, certificates of titles and tenancy agreements).
  • Latest filed annual returns for companies that have been in existence for more than one year after the date of incorporation or registration.

Any activation request that is rejected by the USE shall be communicated immediately by either the USE or the Authorised Selling Agent and the documentation returned giving reasons for the rejection within two days.

 Allocation Policy

In accordance with the objectives of the National Broadband Policy and MTN Group, the purpose of the Offer is to broaden Ugandan shareholding in MTN and provide an opportunity to Ugandan investors to own a stake in MTN and share in the success of the Company. Aligned with this objective, the Allocation Policy is for all Applications from Ugandan Retail Investors and Professional Investors to be given priority, including in the event of Oversubscription.

The responsibility for allocating the Offer Shares lies with the Selling Shareholder taking into consideration the recommendation of the Transaction Adviser. In order to prioritise Applications from Ugandan Retail and Professional Investors, Applications will be considered in the following order:

  1. first, satisfy all duly completed Applications from Ugandan Retail Investors and Eligible Employees;
  2. second, satisfy all duly completed Applications from Ugandan Professional Investors;
  3. third, satisfy all duly completed Applications from Applicants from other East African Community Partner States; and
  4. fourth, satisfy all duly completed Applications from Foreign Investors.

In the event of Oversubscription:

a)   Ugandan Retail Investors making Applications for Offer Shares of an aggregate minimum value of UGX 5 million will be allocated the full number of Offer Shares for that minimum value applied for along with that number of Incentive Shares that they are entitled to, subject to the total number of Offer Shares available; and

b)  All Applications for Offer Shares in excess of an aggregate minimum value of UGX 5 million in the case of Retail Investors will be allocated Offer Shares and corresponding Incentive Shares on a pro rata basis as determined by the Selling Shareholder in accordance with the allocation priority stated above and in such a way that persons within the same category of Applicants shall be treated in a fair and equal manner with regard to their Applications.

 Sale Shares

As mentioned in Section 18.2 (Particulars of the Offer) above, the Selling Shareholder reserves the right to accept or reject any Application for Offer Shares, either in whole or in part, or to accept some Applications in full and others in part, in such manner as it may determine in its sole and absolute discretion.

Without in any way limiting the sole and absolute discretion of the Selling Shareholder to accept Applications in full or in part (and to determine the number of Offer Shares to be allocated in respect of an Application), the Selling Shareholder shall in determining allocations of Offer Shares for cash against Applications received consider:

  1. Oversubscription;
  2. the Allocation Policy as discussed in Section 18.7 (Allocation Policy) and other allocation principles discussed elsewhere in this Prospectus; and
  3. allocation of Incentive Shares as determined in Section 18.9 (Incentive Shares).

In the event that the Selling Shareholder accepts an Application in full, then the relevant Applicant shall be allotted the full number of Offer Shares applied for in the Application and the full cash payment which accompanied the Application shall be deemed paid and collected in respect of the Offer Shares allocated to such Applicant.

In the event that the Selling Shareholder only partly accepts an Application, then the Applicant shall be entitled to fewer Offer Shares than applied for in the Application, and the Applicant shall be entitled to a refund of the balance of the payment which accompanied the Application in respect of which Offer Shares were not allocated,  as provided for in Section 18.6.6 (Refund of excess Application funds) of this Prospectus.

The Offer Shares allocated for cash in terms of this Section 18.8 against an Application represents a determination by the Selling Shareholder of the number of Sale Shares sold and delivered to an Applicant.

For the avoidance of doubt, allocated Sale Shares form part of the Offer Shares, and allocation of Sale Shares correspondingly reduces the Offer Shares available for allocation.

Incentive Shares

As part of the Offer, and in alignment with the objective of broadening Ugandan shareholding in MTN as described in Section 18.7 (Allocation Policy) above, the Selling Shareholder will transfer Incentive Shares at nil cost to the categories of Qualifying Applicants that apply for and are allocated the Sale Shares as set out below. Accordingly, eligible Applicants will receive an allocation of Sale Shares which the Applicants will be required to pay for and, in addition, an allocation of Incentive Shares which the Applicants will not pay for.

The number of Incentive Shares to be transferred to each eligible Applicant will be determined and distributed as follows:

Allocation of Incentive Shares
Number of Sale Shares allocated to Qualifying Applicant Number of Incentive Shares to be allocated 

 

Uganda Retail Investors 5 Incentive Shares for every 100 Sale Shares allocated

 

East African Retail Investors 5 Incentive Shares for every 100 Sale Shares allocated

 

Eligible MTN Customers applying through the m-IPO Platform and  paying through MTN Mobile Money

 

5 Incentive Shares for every 100 Sale Shares allocated (in addition to the general Uganda Retail Investors incentive above)

 

Ugandan Professional Investors  applying for Sale Shares of minimum value of UGX 3.5 billion

 

5 Incentive Shares for every 100 Sale Shares allocated
East African Professional Investors  applying for Sale Shares of minimum value of UGX 3.5 billion 5 Incentive Shares for every 100 Sale Shares allocated
Ugandan Professional Investors  applying for Sale Shares of minimum value of UGX 177 billion

 

10 Incentive Shares for every 100 Sale Shares allocated
East African Professional Investors  applying for Sale Shares of minimum value of UGX 177 billion 10 Incentive Shares for every 100 Sale Shares allocated

In the event of Oversubscription, Applicants making Applications for Sale Shares of an aggregate value of UGX 5 million will be allocated the full number of Sale Shares applied for along with that number of Incentive Shares that they are entitled to, but subject to the total number of Offer Shares available. All Applications for Sale Shares in excess of an aggregate value of UGX 5 million will be allocated Sale Shares and corresponding Incentive Shares on a pro rata basis.

For the avoidance of doubt, allocated Incentive Shares form part of the Offer Shares, and allocated Incentive Shares correspondingly reduces the Offer Shares available for allocation.

Additional Terms and Conditions

The Authorised Selling Agents in respect of the Offer are listed in Appendix C of this Prospectus.

No Application will be considered unless made and submitted through the Application procedure set out in Section 18.6 of this Prospectus and otherwise fulfils the conditions stated in this Prospectus. The right is reserved to accept or reject any Application in whole or in part.

Commissions at a specified rate on the proceeds of the Offer will be paid to the Authorised Selling Agents on allocations made through and attributable to a specified Authorised Selling Agent.

The Selling Shareholder shall have the right at any time and from time to time to take any action it considers reasonably necessary to correct any errors or omissions which may occur whatsoever under or in connection with the Offer and is authorised by each Applicant to take such steps. Although the Selling Shareholder accepts no obligation to do so, this right includes the right to correct payment errors and/to reverse allocations and/or issues of Offer Shares which are allocated and/or issued to an Applicant because of another Applicant using an incorrect payment reference, and to transfer and/or issue the relevant Offer Shares to the intended Applicant. This paragraph applies notwithstanding anything to the contrary in the Prospectus.

Acceptance and Settlement

The Selling Shareholder reserves the right to reject any incomplete Application not complying in all respects with the terms and conditions set out in this Prospectus.

Upon acceptance of Applications, the Selling Shareholder will, as soon as possible after the Offer closes, allocate the Offer Shares, and thereafter, the number of Offer Shares allocated to each Applicant will be credited onto the Qualifying Applicant’s SCD Account following allocation.

In the case of an unsuccessful, or partly successful, Application, the full or surplus Application funds will be refunded by electronic funds transfer to the bank account, or MTN Mobile Money to the mobile money account, of the Applicant concerned provided during the Application process set out in Section 18.6.6 of this Prospectus.

By submitting an Application, an Applicant agrees to accept the transfer of such number of Offer Shares (not exceeding the number applied for) as shall be allocated to the Applicant upon the terms and conditions of this Prospectus and subject to the terms of the Company’s amended memorandum and articles of association, and agrees that the Company may enter the Applicant’s name and particulars in the register of members of the Company as the holder of such Offer Shares.

No securities shall be allocated on the basis of this Prospectus later than six months after its date of issue.

Form of Offer Shares

In compliance with the requirements of the SCD Act, share certificates will not be issued for the Offer Shares. The Offer Shares will, when issued, be held in dematerialised form and registered electronically by the SCD. Successful Qualifying Applicants who provide SCD Accounts will have their respective SCD Accounts credited with the number of Offer Shares allocated to them.

Foreign Investors

Save as described in Important Information – Part B: Selling Restrictions, Foreign Investors may apply for Offer Shares. Any Foreign Investor who wishes to apply for Offer Shares should obtain guidance from any of the Authorised Selling Agents in Appendix C of this Prospectus, before completing and lodging an Application Form. GOU’s foreign investment policy does not limit or restrict any foreign investor from applying for the Offer Shares. In addition, as of the date of this Prospectus, there are no foreign exchange restrictions in Uganda.

Purchase of Offer Shares by Eligible Employees

Eligible Employees participating in the Offer will be entitled to a cash subsidy that is equal to 10% of the aggregate amount payable for the Offer Shares allocated to an Eligible Employee. The maximum amount payable as the 10% cash subsidy is the equivalent of three months’ gross salary of the Eligible Employee as at the date of the Prospectus.

Every Eligible Employee participating in the Offer will pay in full for the number of Offer Shares applied for at the point of submitting an Application. Thereafter, following the completion of allocation procedures and the Listing, the participating Eligible Employee will receive the 10% cash subsidy from MTN. The cash subsidy will be financed in full by MTN, the employer.

Eligible Employees should note that there are likely tax implications for each Eligible Employee who benefits from all or part of the cash subsidy described in this section. As such, Eligible Employees who wish to take advantage of the employee subsidy should seek tax advice prior to completing the relevant portion of the Application Form relating to their employee status.

Any restriction or conditions determined by the Board in connection with employee participation in the Offer may be imposed before or after the Closing Date and shall be communicated to the participating Eligible Employees.

Applicants who are Eligible Employees and wish to take advantage of the employee cash subsidy should indicate their status as employee when submitting an Application.

Representations and Warranties

By completing and submitting an Application by whatever means, each Applicant (or “you” ) warrants and represents as follows to MTN, the Directors and the Selling Shareholder:

  1. that you have full legal capacity and are duly authorised to contract and, having read and understood the Prospectus, you agree to be bound by the terms and conditions of the Prospectus and you irrevocably apply for the number of Offer Shares set out in your Application;
  2. that you are a Qualifying Applicant (or that the person on whose behalf you are applying is a Qualifying Applicant) and that all of the information provided by you in the Application (and any supporting documents) is complete, true and correct in all respects;
  3. that the money you use for your payment for Offer Shares is not the proceeds of unlawful activities constituting a crime or a contravention of any laws, whether in Uganda or in any other jurisdiction. In this respect, you specifically acknowledge that MTN and the Selling Shareholder reserve the right to decline to process any Application where the source of funds supporting it is considered to be suspicious in the sole opinion of MTN and the Selling Shareholder (and acting on the advice of the Transaction Adviser and Lead Receiving Bank). Further, that MTN and the Selling Shareholder shall report any suspicious transaction to the relevant authorities in Uganda or in other jurisdiction;
  4. you acknowledge that the Selling Shareholder will rely on the truthfulness and completeness of the information provided and statements made by you when making its decision to issue Offer Shares to you;
  5. you agree that MTN and the Selling Shareholder are entitled to verify your details and that you are obliged to assist in such verification promptly when requested to do so;
  6. that by opening an SCD Account and applying for Offer Shares through the m-IPO platform, you consent (in terms of the Data Protection and Privacy Act 2019) to the transfer of your relevant personal information from MTN to the SCD, the Selling Shareholder, the Transaction Adviser and the Share Registrar and to the use of that information for all purposes necessary for the allotment of Offer Shares to you and crediting of those Offer Shares onto your SCD Account;
  7. you acknowledge that MTN and the Selling Shareholder or other persons may have claims and rights against you because of the details that you put in your Application, and providing false information could be a criminal offence;
  8. your application for (and holding of) Offer Shares does not and will not contravene any applicable law or regulation or result in a breach of or default under any agreement or other instrument to which you are a party or by which you are bound;
  9. that in making your application, you are not relying on any information or representation concerning MTN or the Selling Shareholder not contained in this Prospectus. You agree that no person responsible for the Prospectus or any part of it will have liability for any such other information or representation;
  10. you warrant and represent that if you submit an Application and are not the Qualifying Applicant, you have authority to do so on behalf of the Qualifying Applicant;
  11. that if the Qualifying Applicant is other than a natural person and you submit the Application on behalf of the Qualifying Applicant, you have authority to do so on behalf of the Qualifying Applicant; and
  12. you acknowledge that the Prospectus is legally binding on and enforceable against you.
Amendment to Terms and Conditions

The Selling Shareholder reserves the right to alter, relax or waive any of the terms and conditions with respect to the making of Applications as the Selling Shareholder, in its sole discretion, may deem fit.

 Right to Suspend the Offer

Subject to the consent of the CMA and the USE, the Selling Shareholder reserves the right to suspend the Offer prior to the Closing Date in the event of the occurrence of a material adverse or force majeure event; a material adverse or force majeure event being an occurrence which detrimentally affects the capital markets locally, regionally or globally.

The occurrence of a material adverse or force majeure event shall be assessed in the sole discretion of the Selling Shareholder. Where the Prospectus is suspended, all Applications funds received from Applicants shall be refunded within 10 working days from the effective date of the suspension.

Governing Law

This Prospectus and any contract resulting from the acceptance of an application to purchase Offer Shares shall be governed by and construed in accordance with the laws of Uganda, and it shall be a term of each such contract that the parties thereto and all other interested parties submit to the exclusive jurisdiction of the courts of Uganda.