MTN Group targets $6bn valuation for mobile-money arm
Telecommunications Company, MTN is reportedly looking to value its mobile money arm at more than $5bn as it prepares to sell or list a minority stake to draw global investors enticed by fast-growing fintech assets.
The Company’s Chief Executive Officer, Ralph Mupita disclosed during an interview with the Financial Times that the unit, which added almost 12m new users to a total of more than 46m last year, should be worth at least $5bn to $6bn and that the group would spin it out within the next year. The Telco giant which has about 280m global subscribers, announced the separation plan last month as part of a strategy shift to refocus its business.
Ralph Mupita stated: “We think the best way to run these businesses is to structurally separate them. In the discussions we’ve had with regulators, they welcome this.” He added that the move would unlock value hidden in MTN’s $11bn market capitalization.
The group wants to tap into growing investor interest in the mobile money businesses built by African telecoms in the past decade that allow phone subscribers to send or receive money outside banks and increasingly sell ancillary services such as micro insurance.
MTN is also aiming to raise cash with a sale and leaseback of most of the group’s mobile-phone towers in South Africa by the end of the year, and it is exiting its troubled Middle East operations.
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