MTN is reportedly lining up an IPO for Nigerian online retailer Jumia, with a view to raising as much as $600 million.
Bloomberg reports that MTN Group is considering the New York Stock Exchange for the listing – although no timeframe has been suggested - with Jumia likely to be valued at around $1.5 billion. MTN would use the proceeds to cut its debt.
Jumia has been a success story in the African start-up space, and has spread its footprint to several African markets. MTN is its majority shareholder, although the investment arms of Africa-focused groups including Millicom and Orange also hold stakes in the company.
With a debt burden of ZAR69.8 billion ($5.1 billion), Jumia’s IPO could deliver MTN a much-needed cash injection. Additionally, the group faces the looming spectre of a $2 billion tax bill in Nigeria. The case has twice been deferred, miring MTN in uncertainty, although a new hearing is set for 26th March.
This was not the only legal trouble for MTN in Nigeria, with the country’s Central Bank alleging that the group had illegally repatriated funds over several years. This dispute has now been resolved, but collectively MTN’s issues in the market have held up its planned IPO of MTN Nigeria, which it has been planning since 2016.