MTN Group on Monday said it had signed an initial agreement with global payments giant Mastercard to sell a minority stake in its fintech arm.
MTN had been trying to unlock value in its financial technology and payments arm amid crippling power cuts that have forced it to set aside extensive capital for backup power systems.
The country’s second largest telecommunications company said it had signed a memorandum of understanding with Mastercard for a minority investment in its fintech arm, valuing it at around US$5.2-billion dollars, almost 40% of MTN’s total market value.
“Following the bespoke process to identify and potentially introduce strategic minority investors into the MTN Group fintech business, we are pleased to announce that we have executed commercial agreements with Mastercard to support the acceleration and growth of our fintech business’s payments and remittance services.
“MTN and Mastercard have further signed a memorandum of understanding, which provides for a minority investment by Mastercard into group fintech based on a total enterprise valuation of about US$5.2-billion (R99-billion) for the business on a cash- and debt-free basis,” it said.
“Signing of the definitive investment agreements is expected to occur in the very near term as we approach finalisation of customary due diligence. The closing of the investment will be subject to customary closing conditions.” — Tannur Anders, (c) 2023 Reuters, with additional reporting (c) 2023 NewsCentral Media