MTN raises R2.3 billion from sale of Jumia stake

Telco sells 18.9% stake of e-commerce platform Jumia as part of R25 billion divestment plan.

MTN has sold off its stake in online retailer Jumia, raising R2,3 billion. Shares in Jumia soared when it became the continent’s first tech firm to list in New York in 2019 and its value rose to close to $4 billion. However, its shares have since slumped by as much as 95 percent. 

In August MTN included the company in a R25 billion divestment plan and said it had filed with the New York Stock Exchange in preparation for a secondary listing of shares to sell its 18.9 percent stake in the company.

“We are proud to have been a partner in the evolution of one of Africa’s pioneering online marketplace businesses and will continue our relationship with Jumia through ongoing operational partnerships in some markets,” MTN said in a third quarter trading statement.

Jumia is facing class action lawsuits alleging misstatements and omissions related to its IPO and has agreed to pay $5 million to settle them.

The retailer has struggled to make a profit and failed to see an uptick in online sales even during Covid-19 lockdown.

MTN said the group’s revenue in the nine months to September 30 rose by 11.4 percent.  It also announced that it had raised R204 million via the transfer of an 8 percent holding in MTN Zambia to the country’s national pension scheme authority and plans to sell a further 12.5 percent of MTN Ghana.