MTN Group is planning to sell part or all of its US$243-million (R4.2-billion) interest in Jumia Technologies as Africa’s biggest wireless carrier looks to pay down debt and enter new markets, according to people familiar with the matter.
MTN, which had previously marked the online retailer as a non-core business, is reviving plans for a sale after Jumia’s shares surged 142% this year, recovering from a dip in 2019, one of the people said. No final decisions about the sale have been made, the people said, asking not to be identified because the plans are private.
Sometimes called Africa’s Amazon.com, Jumia operates in 14 African countries including Nigeria and Ivory Coast where the US giant still lacks distribution infrastructure. The company — headquartered in Germany and run by its two French founders, Sacha Poignonnec and Jeremy Hodara — had dropped below its initial public offering price in 2019 after improper transactions in its Nigeria business were uncovered.
Johannesburg-based MTN has been disposing of non-core assets as part of the company’s strategy to reduce debt and drive future growth.
The company also has a 29% stake in IHS Towers, which it may sell in the future, one of the people said. Africa’s largest wireless carrier by footprint has generated R14-billion in asset sales that included selling its towers holdings in Ghana and Uganda to American Towers. The company plans include bidding for a licence to enter Ethiopia, one of the largest markets that has not yet privatised its telecommunications industry.
A spokeswoman for MTN declined to comment because the company is in a closed period ahead of financial results on Thursday. A representative for Jumia declined to comment. IHS didn’t immediately respond to a request for comment. — (c) 2020 Bloomberg LP