Africa’s largest online retailer Jumia is planning to float an Initial Public Offer (IPO) at the New York Stock Exchange that could see the value of the Nigeria headquartered firm surge to Ksh150.3 billion.
Bloomberg reports that by selling its 40% stake, MTN Group Ltd, Jumia’s largest shareholder is eyeing Ksh60.1 billion, Jumia’s other shareholder, German investor, Rocket Internet SE is also reported to be open to the idea of selling its stake.
Jumia which is valued at Ksh100.2 billion operates in 12 African countries including Kenya has experienced steady growth with its sales growing by an estimated 80% every year since it was started in 2012.
When asked for comment, a spokesperson is said to have rebuffed the claims saying that MTN has not mooted the idea of selling its stake while Rocket Internet declined to comment altogether.
If the claims are anything to go by, the decision by MTN and Rocket Internet to sell their stake in a company which has registered consistent performance in the last 7 years raises a lot of questions.
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Analysts opine that the decision may be owing to the need to offset the company’s hefty debt. According to Nairametrics, a Nigerian markets analysis firm, Jumia’s debt currently stands at Ksh480.9 billion.
MTN is also yet to pay up a Ksh91.7 billion fine imposed on it by the Nigerian Communications Commission for failing to disconnect unregistered sim cards. MTN Nigeria recently signed a Ksh55.6 billion deal with 12 banks to expand its business.
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These factors combined, are considered as the main reasons why the company is in need of the money.
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