MTN is said to plan sale of Jumia stake after agreed lock-in

MTN Group plans to sell at least half of its US$655-million (R9.4-billion) interest in newly listed Jumia Technologies as Africa’s biggest wireless carrier looks to pay down debt and enter new markets, according to people familiar with the matter.

A selldown of the 19% stake in the online retailer could happen before the end of the year, said the people, who asked to remain anonymous as the deliberations are private. Johannesburg-based MTN first needs to wait out a half-year investor lock-in period that followed Jumia’s successful share sale in New York, they said.

“We have a six-month lock-up period where we can’t sell our shareholding,” an MTN spokesman said. “Post that period, we will apply our minds on what to do with the investment.”

MTN is the biggest investor in Jumia, the best performing IPO in New York this year with its share price more than tripling since its 12 April debut. Yet MTN has earmarked e-commerce assets as not central to the company’s main business of phone and data services, and has announced a R15-billion disposal plan.

Other investments that could be sold include interests in flight-booking site Travelstart.co.za and telecommunications masts operator IHS Towers. Net debt rose to R63.5-billion from R57-billion in 2018, and proceeds will be used to pay that down, MTN said in March.

Often nicknamed Africa’s Amazon.com, Jumia operates in 14 African countries including Nigeria and Ivory Coast where the US giant lacks distribution infrastructure and much presence. The company is headquartered in Germany and run by its two French founders, Sacha Poignonnec and Jeremy Hodara.

MTN’s shares have gained almost 7% since the Jumia IPO, valuing the company at R194-billion. The stock hit eight-month highs earlier in April.  — (c) 2019 Bloomberg LP