MTL Sale Set to Supercharge Malawi’s Economy: A New Era of Investment and Growth
Key Business Points
- Press Corporation Limited (PCL) is nearing the completion of the sale of its subsidiary, Malawi Telecommunications Limited (MTL), with the deal expected to be finalized by mid-August, marking a significant development in Malawi’s telecommunications sector.
- The sale of MTL is seen as a strategic move by PCL to address the company’s financial underperformance, which has struggled to remain competitive in the market, and to potentially unlock new investment opportunities for the company.
- Listing subsidiaries on the Malawi Stock Exchange is being suggested as an alternative to outright sales, which could enhance price discovery, deepen the market, and improve corporate visibility, as noted by equity market analyst Kondwani Makwakwa, using the Chichewa term "Kugawana zinthu" to emphasize the importance of sharing resources and opportunities.
The potential sale of MTL, a subsidiary of PCL, has been a topic of discussion in Malawi’s business community, with the company’s Board Chairperson, Radson Mwadiwa, stating that only a few formalities remain before the deal is completed. This development comes after years of financial underperformance by MTL, which has struggled to remain competitive on the market. The company reported a profit after tax of K1.04 billion for the financial year ending December 31, 2024 — its first profit in over a decade. As Makwakwa noted, "Kusaka bizinesi" (growing a business) requires strategic decisions, and the sale of MTL could be a crucial step in PCL’s efforts to restructure and strengthen its portfolio.
Commenting on the development, Minority Shareholders Association of Listed Companies (Misalico) General Secretary, Frank Harawa, described the decision to sell MTL as "ziovuta bwino" (a very good idea), adding that PCL had held on to the company for too long. However, he also urged PCL to consider listing some of its subsidiaries on the Malawi Stock Exchange as an alternative to outright sales. "Kuwerengera" (to list) some of its subsidiaries, such as Ethanol Company (EthCo) and PressCane, could provide new opportunities for growth and development, as well as reduce the risk of corruption, according to Harawa.
Equity market analyst Kondwani Makwakwa noted that listing shares to the public could offer benefits, especially as Malawi’s stock market is growing with increasing investor interest. "Kutenga chuma" (to list shares) could enhance price discovery, deepen the market, and improve corporate visibility. However, Makwakwa also cautioned that MTL’s recent history of underperformance could complicate a successful listing. Assuming MTL has faced performance challenges in recent years, it may struggle to meet listing requirements or attract strong investor demand, which could lead to undervaluation and harm PCL’s reputation and broader market sentiment.
As the sale of MTL nears completion, Malawian entrepreneurs and business owners are advised to keep a close eye on the development and its potential impact on the market. The move could create new opportunities for investment and growth, and businesses should be prepared to adapt to the changing landscape. With the Malawi Stock Exchange continuing to grow, companies should consider listing their shares to tap into the growing investor interest and unlock new capital. By doing so, they can "Kuvutika" (to grow) and expand their operations, contributing to Malawi’s economic growth.
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