Africa’s largest wireless carrier cutting back on e-commerce
- Jumia is the best performing listing in New York this year
MTN Group Ltd. plans to sell at least half of its $655 million interest in newly listed 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.
A sell-down of the 19 per cent stake in the online retailer could happen before the end of the year, said the people, who asked to remain anonymous as the deliberations are private. Johannesburg-based MTN first needs to wait out a half-year investor lock-in period that followed Jumia’s successful share sale in New York, they said.
“We have a six-month lockup 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 best performing IPO in New York this year with its share price more than tripling since its April 12 debut. Yet MTN has earmarked e-commerce assets as not central to the company’s main business of phone and data services and has announced a 15 billion rand ($1 billion) disposal plan.
Other investments that could be sold include interests in flight-booking site Travelstart.co.za and telecommunication masts-operator IHS Towers Ltd. Net debt rose to 63.5 billion rand from 57 billion rand in 2018, and proceeds will be used to pay that down, MTN said in March.
Often nicknamed Africa’s Amazon.com, Jumia operates in 14 African countries including Nigeria and Ivory Coast where the U.S. giant lacks distribution infrastructure and much presence. The company is headquartered in Germany and run by its two French founders, Sacha Poignonnec and Jeremy Hodara.
MTN’s shares have gained almost 7 per cent since the Jumia IPO, valuing the company at 194 billion rands. The stock hit eight-month highs earlier in April.