MTN Group Ltd. agreed to pay a 330 billion naira ($1.7 billion) fine to the Nigerian government, one-third of the original penalty, removing a major uncertainty hanging over the phone carrier’s operations in its largest market.
MTN rose as much as 21 percent in Johannesburg. It traded 16 percent higher at 143.50 rand as of 1:21 p.m, on track for the biggest gain since 2008.
Africa’s biggest mobile-phone company will also “take immediate steps” to list shares of its Nigeria unit on the country’s stock exchange, Johannesburg-based MTN said in a statement on Friday. The fine will be paid over three years.
The agreement ends eight months of start-and-stop negotiations with Nigerian officials over how to settle the fine, which was levied for being slow to disconnect customers unregistered in the country. Chairman Phuthuma Nhleko came out of retirement to oversee the process, hiring former U.S. Attorney General Eric Holder to lead negotiations.
The deal “is the best outcome for the company,” Nhleko said in the statement. “The relationship between MTN, the Nigerian government and the Nigerian Communications Commission has been restored and strengthened.”
MTN’s battle with Nigerian authorities over payment of the fine had cost the company its status as Africa’s highest valued telecommunications operator, lowering the stock price by one-third amid a lack of clarity about the negotiations and posturing by Nigerian politicians. The government originally issued a $5.2 billion penalty and later lowered it to $3.9 billion.
MTN was hit with the penalty after failing to comply on time with an order to disconnect 5.1 million customers deemed by the regulator to be unregistered in Africa’s most populous country. Nigeria has sought to cut off service to some users as they fight crime and in a country with poor identity records. The insurgent group Boko Haram’s campaign to establish its version of Islamic law in Nigeria has left thousands of people dead since 2009.
MTN engaged Holder, a partner at law firm Covington & Burling LLP, to challenge the penalty. Holder, the U.S. attorney general from 2009 to 2015, now advises clients on litigation matters.
Sifiso Dabengwa resigned as CEO of MTN in November to take responsibility for the dispute.