By Modupe Gbadeyanka
The share price of Jumia Technologies appreciated by 0.59 per cent or $0.10 at the New York Stock Exchange (NYSE) on Thursday to $17.10 per share after news of MTN Group exiting the company was reported.
Bloomberg had claimed that one of the people in the know of the matter, who asked not to be identified because the plans were private, disclosed the telco wants to sell part or all of its $243 million interest in the Africa’s Amazon.
In December 2013, MTN invested in Jumia Group and became a 33.3 per cent stakeholder in the e-commerce company. Later, the telecom company invested an additional $143 million in Jumia Group, increasing its stake to 41.4 per cent.
In 2019, Jumia Group listed its shares on NYSE through an initial public offering (IPO) at $14.50 per share, but after the exercise, the share price of the company plunged below the IPO price.
But the stock of Jumia has since recovered from the 2019 decline, appreciating by 142 per cent this year.
MTN Group, as part of its strategy to pay off its debts and expand into new markets, is planning to offload its stakes now that the prices are okay, though no final decisions about the sale had been made.
In recent time, MTN has not hidden its intention to sell some of its assets to expand its operations in Africa, where it has more say.
It was reported yesterday that the company was planning to exit the Asian markets, especially in Syria, which has been battling with unrest in the country.
According to the Group President and Chief Executive Officer (CEO) of the firm, Mr Rob Shuter, during the presentation of its half-year result, MTN was already in advanced discussions to sell its stake in MTN Syria to TeleInvest, which is the minority shareholder in MTN Syria with a 25 per cent holding.
“As part of the review of our portfolio, we believe the group is best served to focus on its pan-African strategy and to simplify its portfolio by exiting the Middle East region in an orderly manner,” Mr Shuter had said.
In Uganda, the company recently closed a 12-year extension of its telecommunications licence after starting the process in October 2017, paying $100 million for it compared with the $6 million paid for the same licence in 1998.
MTN plans to invest over $300 million in Uganda in the next five years for better network coverage and then list MTN Uganda on the Uganda Securities Exchange with 20 per cent of shares in the next two years.
In 2019, MTN listed its Nigerian unit on the Nigerian Stock Exchange (NSE) after years of negotiations on the matter.
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