The menacing dollar scarcity that has pervaded the Nigerian economy since 2016 is said to be responsible for the suspension of the $1 billion initial public offering by Interswitch Ltd.
Reports suggest, foreign investors, who were mainly the target market for the offer have been adamant to invest in the stock market due to the flurry of exchange rate existing in the Nigerian economy. They fear any investment in Nigerian equities at this time could lead to significant loss of value as the currency may face further devaluation.
The company that processes payment for banks has issued more than 15 million cards in Nigeria amid an economic recession. Experts say the company’s stellar performance is based on the fact that Nigerians are increasingly using the electronic mode of payment to settle transitions. According to data from the CBN online transactions now top about 10 billion monthly while POS transactions topped an average of N50 billion monthly in 2016 respectively.
The Central Bank of Nigeria (CBN) had peg the Naira at N197-N199 for 15 months before jettisoning it and adopting a flexible exchange rate system that saw the currency lose 40 percent of its value against the US dollar.
Interswitch announced in June that it was considering an initial public offerings in London and Lagos in 2017. Interswitch is about 70 percent-held by London-based private equity group Helios Investment Partners LLP, South Africa’s Adlevo Capital Managers LLC and the International Finance Corp., a unit of the World Bank
Helios bought 52 percent of Interswitch for $96 million in Dec. 2010 putting the value at about $184.6million back then
