MTN said on Friday it had sold its stake in loss-making online retailer Jumia, raising R2.3 billion from an investment it once thought worth more than double that.
Dubbed “the Amazon of Africa”, shares in e-commerce unicorn Jumia soared when it became the continent’s first tech firm to list in New York in 2019.
Its value rose to close to $4 billion, but its shares subsequently slumped by as much as 95% after short-seller Citron Research cast doubt on its sales figures.
MTN included the company in a R25 billion divestment plan and said in August it had filed with the New York Stock Exchange in preparation for a secondary listing of shares to sell its 18.9% 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 has agreed to pay $5 million to settle class action lawsuits alleging misstatements and omissions related to its IPO.
It has struggled to make a profit even amid coronavirus lockdowns it was hoped would lead to a flood of online orders.
A Jumia spokesman said the company thanked MTN for its support over the years, and that it was part of the life of a company to see early backers replaced by new shareholders.
“We remain strong partners in all countries where we both operate,” he person continued, adding Jumia was focused on executing its strategy and confident of success.
MTN in its trading statement said the group’s revenue in the nine months to September 30 rose by 11.4%. Its shares were 3.62% higher by 09:33.
It also announced that it had raised R204 million via the transfer of an 8% holding in MTN Zambia to the country’s national pension scheme authority and plans to sell a further 12.5% of MTN Ghana.