- MTN to Sell Jumia Stake After Lock-in Period
MTN Group Ltd is expected to sell at least half of its $655 million investment in Jumia Technologies AG after the lock-in period.
Earlier this year, the telecommunication giant announced it would relinquish its stake in the newly listed company to pay off its debt and better position the company through investment in new markets.
MTN presently own about 19 percent of the e-commerce company and there are preparations to sell the entire stake or part of it before the end of the year, when the company lock-in period would have expired, stated an anonymous source familiar with the matter.
“We have a six-month lock-up period where we can’t sell our shareholding,” an MTN spokesman said. “Post that period we will apply our minds on what to do with the investment.”
MTN is the biggest investor in Jumia, the Amazon of Africa with the best performing IPO in New York this year.
Jumia (JMIA) has risen more than 300 percent since its debut on the New York Stock Exchange on April 12. In the first three days, JMIA gained 204 percent as investors see the e-commerce giant as the door to Africa’s growing market and potential.
Despite the surged in Jumia’s market capitalization from around $1 billion to $3.50 billion, MTN doesn’t see the company as the center of its business going forward, especially now that the telecommunication company will like to focus mainly on phone and data services and its planned listing on the Nigerian Stock Exchange.
MTN will be looking to sell stakes in other companies, flight-booking site Travelstart.co.za and telecommunication masts-operator IHS Towers Ltd, to pay off its rising debt of 63.5 billion rand, up from 57 billion rand in 2018.