Rwanda’s Crystal Telecom to close shop as MTN lists shares

Rwanda’s Crystal Telecom, a special purpose vehicle (SPV) that was established in 2015 to manage a 20% stake in MTN Rwanda, is set to close its doors. The decision comes as MTN announces plans to list its shares, prompting a strategic shift towards direct ownership for investors. In a recent interview with CNBC Africa, the CEO of Crystal Telecom, Iza Irame, shed light on the motivations behind this move. Irame explained that the closure of Crystal Telecom is a natural progression driven by MTN's intention to list. As an SPV holding MTN shares, it makes sense for Crystal Telecom to follow suit and have its shareholders directly own shares in MTN. Reflecting on the journey since its inception in 2015, Irame expressed satisfaction with the success of Crystal Telecom in enabling investors to own a stake in MTN. The impending transition will further align investors with the telecom giant, enhancing transparency and efficiency. Discussing the broader implications of this shift, Irame highlighted the potential for similar financing models in other sectors. While direct listing is preferable, SPVs can offer viable alternatives for companies looking to tap into capital markets. The listing of MTN on the Rwanda Stock Exchange signals a positive development for the market, attracting both traditional and sophisticated investors. Addressing the impact on shareholders, Irame emphasized that the transition would streamline communication and enhance tax efficiency. By eliminating the third-party intermediary, investors stand to benefit from direct engagement with MTN and improved governance practices. The removal of double taxation under the new structure is expected to result in higher dividends for shareholders. In light of recent market volatility, particularly concerning MTN's share price, Irame noted that fluctuations are influenced by various factors including company performance, dividend payments, and market dynamics. Despite launching multiple products annually, MTN's share price movements have not experienced significant volatility, raising questions about market perception and investor sentiment. As Crystal Telecom prepares to close shop and MTN embarks on its listing journey, the Rwandan market is poised for a transformative shift towards direct ownership and enhanced market participation. The decision marks a significant milestone in the evolution of capital markets in Rwanda, underscoring the importance of transparency, efficiency, and investor engagement. In conclusion, the closure of Crystal Telecom symbolizes a strategic realignment towards direct ownership and increased market liquidity. The move reflects a broader trend towards investor empowerment and transparency in Rwanda's evolving financial landscape.