Mr. Selorm Adadevoh, CEO, MTN Ghana
Mr. Selorm Adadevoh, CEO, MTN Ghana

Swap dividend for additional shares or take cash : MTN proposes through scrip dividend plan

Telecommunication giant, MTN Ghana, is proposing a ‘juicy’ plan to its shareholders through a scrip dividend which gives them an opportunity to increase their stake in the company without incurring any capital market-related transaction costs such as fees to brokers.


The Scrip Dividend Election Plan (SDEP) gives qualifying shareholders the opportunity to elect or choose to receive their dividends in the form of new ordinary shares in the company instead of cash.

The reverse of the proposed action is that, it will benefit the company as the cash, which would otherwise be paid out in dividends, will be retained for working capital and other general corporate purposes.


Meanwhile, the company’s Annual General Meeting (AGM), has been scheduled for today to among other things, approve a final dividend of GH¢0.124 per share for the 12-month period ended  December 31, 2022.

The board, at its meetings on February 27, last year, agreed to pay the proposed amount but subject to its adoption by shareholders who are most likely to endorse the scrip dividend approach adopted by the company. 

Analysts believe the method chosen by MTN to raise funds at virtually no cost to the company to finance its expansion projects is one of the best options to save it the burden of having to raise funds from banks at exorbitant interest rates.

Scrip dividend

Qualifying shareholders may receive the final dividend either in cash or in new ordinary shares, a release from the Ghana Stock Exchange (GSE) said. 

“The minimum requirement to qualify for the scrip dividend or new ordinary shares is an entitlement to a gross final dividend equivalent to a one hundred  new ordinary shares (GH¢129.35 or more) and subsequently an equivalent in blocks of 10 shares (incremental of GH¢12.93 per block). No fractional new ordinary shares will be issued,” the release further clarified. 

It explained that in line with the computation mechanism of the Scrip dividend guideline, every qualifying shareholder may choose to receive a new share for every cash dividend forgone. 

It noted, however that, where no selection is made, the default option will be payment in cash. 

Who benefits most

With this scenario, experts foresee that many individual shareholders of the blue chip company in particular,will not benefit from the offer  because they are either not aware or understand the proposal on the table.

Those to benefit from the development are expected to be mainly institutional investors who have a structured system and experts to consider the options and advise accordingly.

 “To elect to receive your final dividend in new ordinary shares, a qualifying shareholder must complete the scrip election/mandate form and submit to the Registrar (Central Securities Depository) no later than June 6, 2023,”  the release added.

Default option

Regarding the default option for qualifying shareholders, the release noted that; “The default option shall be cash. In other words, the following sets of qualifying shareholders who shall automatically receive their dividends in cash should be: Qualifying shareholders who do not submit an election form: Qualifying shareholders who do not make any selection on the election form: Qualifying shareholders who select both options on the election form: and qualifying shareholders whose net cash dividends are less than GH¢119 (gross dividend equivalent: GH¢129.35).

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