Rwanda: Rura Fine to Hit Crystal Telecom Investors Most
26 May 2017
Investors in Rwanda's Crystal Telecom have reason to worry after Rwanda's leading telecommunications firm MTN was hit with a $8.5 million fine by the sector regulator.
Crystal Telecom, a listed public company, owns a 20 per cent stake in MTN Rwanda while MTN Group owns 80 per cent. The Rwanda Utilities Regulatory Authority (Rura) slapped the fine on MTN Rwanda for failing to comply with licence obligations, a development that has unsettled investors.
The fine is expected to impact the Crystal Telecom dividend payout. A meeting of shareholders was scheduled last Friday to appraise them of the implications of the penalty.
"Investors will be aware of the official notification of sanction against MTN Rwandacell by Rura... Crystal Telecom has submitted a request to better understand the issue and communicate the subsequent outcome from their [Rura and MTN] engagement," a statement from Crystal Telecom reads.
By press time, the outcome of the meeting was not available, but sources said the fine will bear heavily on the dividends, considering that it is only slightly lower than what the telco makes in a month.
Crystal Telecom floated 270,177,320 of its shares in MTN Rwanda in April 2015, accumulating Rwf28.3bn ($33.4 million) in proceeds.
While most stocks listed on Rwanda Stock Exchange have lost value due to low liquidity, dealmakers are concerned the fine from the regulator could further bring down the stock prices.
Source: The East African