ABUJA (Reuters) – MTN Group has agreed to pay a reduced fine of 330 billion naira ($1.7 billion) in a settlement with the Nigerian government of a long-running dispute over unregistered SIM cards, sending shares in the South African telecoms group soaring.

The settlement clears the way for MTN to list its local unit on the Nigerian Stock Exchange. Such a step had been on the firm’s radar but plans accelerated during negotiations over the fine, Executive Chairman Phuthuma Nhleko told Reuters.

The fine will be paid by MTN Nigeria over three years and is only around a third of the $5.2 billion figure initially demanded by the west African country last October for failing to deactivate more than five million unregistered SIM cards.

Nigeria has been cracking down on unregistered SIM cards, concerned they are used for criminal activity in a country fighting an insurgency by Islamist militant group Boko Haram.

MTN had threatened to pull out of Nigeria as paying the fine in full would have crippled its local operations, a government official said, asking not to be named.

“The present administration does not want to ground the operations of any investor in Nigeria,” he said.

Nigeria, Africa’s largest economy and most populous nation, faces its worst crisis for decades after the sharp fall in oil prices and last year’s introduction of a currency peg that put investors to flight.

But in a possible complication, Nigeria’s House of Representatives said it was surprised by the deal as its own probe into the MTN fine had not been concluded.

In March, the lower house launched an investigation, arguing that reducing the initial fine of $5.2 billion would require changing the law.

“We are still continuing with our investigation,” Fijabi Akinade, chairman of the House’s committee on communications, told Reuters. Lawmakers had summoned the communications minister and a top regulator official to discuss the deal on Monday.

“We want to know how they arrived at that decision and if it was done in good faith … But honestly, we are surprised,” Akinade told Reuters.

The dispute removed a cloud hanging over MTN and its shares surged more than 20 percent at one point and closed 13.18 percent higher at 140 rand. They had shed 22 percent since the fine was first announced.

“The relationship between MTN, the Federal Government of Nigeria and the Nigerian Communication Commission (NCC) has been restored and strengthened,” Nhleko said.

The Nigerian regulator said the settlement was acceptable to both parties and that it had not been “out to kill MTN”.

“Money was not the issue here. The breach was the issue. I believe MTN has learned its lesson,” NCC spokesman Tony Ojobo told Reuters.

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MTN is the largest mobile phone operator in Nigeria with 62 million subscribers and the west African nation accounts for about one third of its revenues.

Nhleko, who was chief executive for nine years until 2011, was appointed on an interim basis for six months in November but has stayed on as the company negotiated with Nigerian authorities.

In February, MTN hired Eric Holder, the former U.S. attorney-general, to help negotiate the fine.

MTN, Africa’s largest telecoms company, has already paid 50 billion of the 330 billion naira owed. The rest will be paid in six instalments over three years, the company said.

Five weeks after the fine was first announced, MTN’s chief executive Sifiso Dabengwa resigned and the company asked Nhleko to take the reins temporarily.

A Johannesburg-based analyst gave Nhleko credit for not settling the fine earlier at a figure of $3.9 billion, the first sign Nigerian authorities gave after months of talks that it was willing to accept a lower sum.

“He’s the guy who built this ship and this shows he can still steer the ship,” Momentum SP Reid Securities analyst Sibonginkosi Nyanga told Reuters.

The telecommunications firm which spans 20 countries, set aside $600 million in March to pay the fine.($1 = 198.0000 naira)

(By Zandi Shabalala and Camillus Eboh. Additional reporting by Alexis Akwagyiram and Camillus Eboh in Lagos; Editing by Keith Weir and Mark Potter)

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By Barbara Lewis and Mamidipudi Soumithri

LONDON/BENGALURU (Reuters) – South Africa-focused platinum producer Lonmin reported a core profit on Monday after cost savings, and said it expected firm chemical and car industry demand for the rest of the year despite the Volkswagen diesel emissions scandal.

Its shares rose more than 14 percent in early trading, outperforming the wider mining sector, which was around 2 percent higher.

Lonmin’s shares have lost around 90 percent of their value over the last year, hit by a strike, rising costs and plunging platinum prices. In December, the company raised $400 million from selling new shares.

In its first-half results statement, Lonmin said it had cut losses per share to 1.8 cents from a loss of 164.6 cents the same time a year ago, and reported a core profit of $36 million versus a loss of $6 million in the first half of 2015.

Cost-cutting is ahead of schedule, with close to 70 percent of the full-year target of savings of 700 million rand ($45 million) already achieved.

Net cash improved to $114 million at the end of March, compared with $185 million net debt at the end of September.

CEO Ben Magara said in a conference call he did not anticipate further job cuts at current market conditions, but added conditions may change.

Volkswagen’s admission last year that it cheated U.S. diesel emissions tests could, analysts have warned, hit sales of diesel cars, which need platinum for catalytic converters.

But Lonmin predicted emerging markets would spur demand as they seek to catch up with the “ever tightening emission standards of developed markets”.

It also said it saw firm chemical industry demand, while the jewellery market could remain static during the year.

($1 = 15.5008 rand)

(Editing by Adrian Croft and Mark Potter)

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By Duncan Miriri

NAIROBI (Reuters) – Kenya’s Equity Group Holdings, the country’s second largest bank by assets, reported a 19 percent rise in first-quarter pretax profit and said growth would come from expanding its subsidiaries rather than new acquisitions.

The failure of three small and mid-sized banks in Kenya in the past year has fueled talk of consolidation, with Equity’s rival Kenya Commercial Bank planning to buy one of the institutions now under administration.

But Equity Group Chief Executive James Mwangi said he would focus on expanding his bank’s existing subsidiaries in the region. After acquiring a lender in the Democratic Republic of Congo, Equity has already added a dozen new branches.

“We will focus on these subsidiaries and make them substantial actors in the markets they are in,” he told an investor briefing.

Alongside Congo, his bank also has units in Uganda, Rwanda, Tanzania and South Sudan.

Equity reported a pretax profit for the first quarter of 2016 of 7.3 billion shillings ($72.71 million), as it secured cheaper funds from shareholders and creditors while increasing lending to customers.

The bank increased its borrowed funds by 76 percent to 46.0 billion shillings. The extra funds came with an interest rate of Libor plus one, or about 4 percent, and was lent to customers at prevailing double-digit rates, he said.

Net loans increased by 22 percent from the same period last year to 275.0 billion shillings. Total costs grew 17 percent during the period as staff costs and loan loss provisions rose.

Non-performing loans stood at 3.8 percent of the total, below the 8 percent recorded for the industry in March.

($1 = 100.4000 Kenyan shillings)

(Reporting by Duncan Miriri; Editing by Edmund Blair and Louise Heavens)

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