The value of Crystal Telecom Ltd (CTL) stock increased 110.5 percent, ahead of delisting and winding up of the company on May 4, 2021, fuelled by optimistic sentiments of investors.
The Crystal Telecom share price hit a record high of Rwf200 ($0.20) from an average of Rwf95 ($0.096) for the past 12 months to first three weeks to April, below the telecom issue price.
Crystal Telecom was established as a special purpose vehicle for the public to hold shares in MTN Rwanda which were initially held by Crystal Ventures Ltd, a business arm of Rwanda’s ruling party Rwanda Patriotic Front (RPF).
CTL owns 20 percent while the remaining 80 percent of MTN Rwandacell shares are held by MTN Group Ltd.
In July 2015, Crystal Telecom shares in MTN Rwandacell were listed on Rwanda Stock Exchange. Crystal Telecom annual general meeting in March approved to dissolve the company and distribute the shares held in MTN Rwandacell as excess assets to the shareholders after payments of all the company’s liabilities.
The AGM also approved the proposed delisting from the stock exchange as well as deregistration.
Once Crystal Telecom is delisted from Rwanda Stock Exchange on May 4, the 20 percent shares it owns in MTN Rwandacell will be distributed to its shareholders on a 1-for-1 basis.
This means shareholders will receive one share in MTN Rwandacell for each share they own in Crystal Telecom.
The total number of introduced shares is 1,350,886,600 representing 100 percent of the issued share capital of MTN Rwandacell but the free float available for trading is the 20 per cent of all shares issued in the share capital of the Company currently held by Crystal Telecom.
Rwanda Stock Exchange CEO Celestine Rwabukumba says the move to allow investors own shares directly in MTN Rwandacell excited the market.
Specifically, Rwanda capital markets managers expect the stock to attract foreign investors, a development which will provide liquidity for existing and future shareholders.
The company being of a good size, according to Rwabukumba, also adds on the number of leading brands on RSE and offers more visibility into the company’s operations to shareholders and the general investing public.
“MTN Rwanda joining the RSE list of companies is a great and welcome development for our market as it increases our market capitalisation,” said Mr Rwabukumba.
The MTN Rwandacell financial results for the full year to December 31, 2020 show the company generated Rwf152 billion ($154.5 million) in revenue compared to Rwf125.41 billion ($127.5 million) in 2019.
The company net profits jumped to Rwf20.2 billion ($20 million) in 2020 from Rwf6.81 billion ($6.9 million) driven by voice, data and financial services business market segments.
This article was first published in The EastAfrican newspaper on May 1, 2021.