MTN Group is planning to sell part or all of its $243 million interest in Jumia Technologies AG. This is part of the telco’s effort to raise funds to pay down debt and enter new frontiers.
According to Bloomberg, MTN would be taking advantage of the fact that Jumia’s shares have gained about 142% so far in 2020, recovering from its record lows in 2019.
However private sources told Bloomberg News that no decision about the sale has been reached yet.
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Jumia, Africa’s largest online retailer, is operational in 14 African countries including Nigeria. Jumia Technologies AG is headquartered in Germany and run by its two French founders, Sacha Poignonnec and Jeremy Hodara.
At the time this report was drafted, MTN Group was trading ZAR 6,000, gaining 4.42% while Jumia AG was down 22.48% to trade at $16.28
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Why this could be happening:
MTN has been trying to dispose of its non-core assets as part of the business strategy to minimize debt and open new markets.
MTN Group also has about a 29% stake in IHS Towers, which could be put for sale. MTN Group by footprint has generated about $812 million in asset sales that included selling its towers holdings in Ghana and Uganda to American Towers Inc.
Africa’s biggest carrier plans to bid for a license to enter Ethiopia, one of Africa’s largest markets that have not yet privatized its telecoms industry.