Tuesday , August 9 2022
MTN Rakes $138 Million from 18.9% Stake in Jumia

MTN Rakes $138 Million from 18.9% Stake in Jumia

Having successfully exited Jumia upon sales of its remaining 18.9 percent stake, MTN Group announced that it has raised $138 million from the investment deal.

The announcement was made on Friday through MTN Group’s Q3 2020 financial report.

“The MTN Group has now fully exited its 18.9 percent investment in Jumia Technologies AG (Jumia), realizing a total consideration of approximately R2.3 billion (US$138 million)”.

The company, which is Africa’s largest mobile operator, is in the process of consolidating its mobile technology assets to focus on the African market, which has been its stomping ground for years.

Jumia, which is listed in New York, operates in 14 African countries and is considered a market leader in e-commerce, with a market capitalisation of $1.3 billion.

MTN said it had exited the company as part of its “asset realisation programme”.

According to Bloomberg, MTN Group invested $243 million in Jumia: “MTN Group Ltd. is planning to sell part or all of its $243 million interest in Jumia Technologies AG as Africa’s biggest wireless carrier looks to pay down debt and enter new markets, according to people familiar with the matter”.

Also, GSMA stated “in December 2013, MTN, together with Millicom and Rocket Internet, became a 33.3% stakeholder in Africa’s e-commerce and digital services company Jumia Group (formerly Africa Internet Group (AIG). MTN has since invested an additional $143 million in Jumia Group, increasing its stake to 41.4 percent.”

By the time Jumia went public, MTN held 29.7% of the company. The implication is this: MTN sold 11.7% during the IPO process. Jumia began trading at $14.50.

It also fetched R204 million from the localisation of its 8% shareholding in MTN Zambia.

The company said in August it would begin its exit out of the Middle East by selling its 75% stake in Syria to Romanian technology investment company TeleInvest, in a process which would take between three to five years.

ALSO READ: MTN Nigeria Digital Revenue Rises by 114.3% in Q3 2020

The offloading of a stake in Iran’s ride-hailing app Snapp is also being considered.

In an operational update on Fridad its growth in the third quarter was supported by strong performance of its operations in South Africa, Nigeria and Ghana, which saw it add 12 million subscribers to hit 273 million users across its 21 markets.

Service revenue during the quarter increased by 11.4% to more than R43 billion, as Covid-19 restrictions drove demand for data usage.

“We have now increased our full year forecast for capital expenditure to R26 billion, to ensure that our networks provide reliable connectivity and digital services to all of our 273 million-and-growing subscriber base,” said Ralph Mupita, chief executive officer.

The group also reported growth of 21% in fintech revenue and 37.5% in digital revenue, driven by the increased adoption and usage of digital offerings.

 

 

 

 

 

About Bukola Olanrewaju

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