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I Approve This Message

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I JOIN Samuel Samuel Arawu, MSc to approve this message on Tekedia Mini-MBA: “Having taken this course, I’m delighted to have completed it and I’d recommend this course for a professional at any level. The course content is just amazing. If you must intrude and capture global markets, you’d need this program. Thank you Prof Ndubuisi Ekekwe for such a well crafted program”.

In 2020, we will graduate more members than any polytechnic in Africa. In 2021, our target is to surpass any university in the continent. But while we do that, we are improving quality while making sure cost stays low.

REGISTER for our next edition here.

Source – LinkedIn

Good Morning, Nigeria – Happy New Month

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Nigeria, good morning. October is past but November is here, and is a PROMISE. October liberated Nigeria, 60 years ago, from the fangs of physical colonialism, but Oct 2020 reminded us how we are still in the miry clay of economic paralysis, with the smell of the pastures still far away. But we can shorten that “far away” and bring abundance in the land. Yes, to rise to the mountaintop, we must unite to make that promise come, faster, for all. Happy new month.

The Aftermath of the Violence and Massive Looting in Nigeria

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“Sir, this year no balance o. There were only six months this year so I will pay half rent…Don’t worry sir, you can’t take me to court or call the police for me or even call the army because all of them are not working now.”

That was the banter I had with my landlord’s lawyer some days ago when he called to remind me that my rent will soon be due. We laughed over it and made more silly jokes about the current situation of things in the “post-protest-and-looting” Nigerian era. We actually had a lot of stories to tell concerning this point in time.

But I stopped laughing about our predicament when I left my house for my office. I stayed in a gridlock for about an hour and began to curse the absence of the traffic wardens. You might not believe me if I tell you that there was no reason for this traffic jam except that every driver wanted to be the first to cross a T-junction. We all wanted to get to our destinations in time and so everybody nosed his car into the road, hoping that the ones coming from the other directions will wait for him. But when everybody is in a hurry, no one gets to his destination on time. And so, we stayed on the road, cursing and abusing one another until military men from the 84 Division came to the rescue.

That moment I was stuck in the gridlock reminded me of the importance of law and order. I was not only afraid of being crushed by trailers struggling on the road with us but also scared that someone might reach out through the window and make away with my belongings. There was no police officer in sight and there was no one that would have stopped something sinister from happening. It was all man to himself. Everybody was on his own. The strong suppressed the weak and the big sat on the small. Nigerians really showcased their “talents” at that moment.

But gridlock is just one of the happenings in Nigeria today. Have you gone to market after the violence and looting that rocked the country? What can you say about the sudden surge in the prices of goods? Have you noticed something about certain food items becoming scarce all of a sudden? What can you say about onions, tomato puree (aka tin and sachet tomato), rice, meat, among others? Can we survive this one so?

What about obtaining cash? Have you noticed how POS centres are springing up left and right and centre within this past week? How much did you pay to withdraw money from POS? Here in Enugu we pay five to ten percent of the amount you are about to withdraw. It is more like buying cash these days. As for the ATM, we all know how they were vandalised. The ones that were still left standing were either not operational or loaded with little cash. It is so bad that by the end of the day, you might stay an hour on ATM queue and be told “Temporarily unable to dispense cash” when it comes to your turn.

The essence of stating these is just to reveal some of the aftermath of the violence and looting the country experienced the past week. The hoodlums and the looters first destabilised the security system in the country to make sure they will not be “bothered” as they carried out their operations. But the majority of us clapped for them and encouraged them. We thought they were dealing with the “government” forgetting that nobody’s name is “government” and that those things that were destroyed will be repaired with “our money”. Someone told me that those in authority will use the money they would have looted to fix the damages but she forgot that no one will force the government to fix them on time. Hence, we are going to “enjoy” the mess caused by our children until god knows when.

But the looting and damages on private properties is what many of us did not envisage. Like the Igbos say, “Onye nna ya ziri ori na-eji ukwu agbawa uzo”, meaning that when you encourage a person to do what is wrong, he will go the extra mile. Hence, while we clapped for and fanned the flame of destruction in the “youths”, we never knew that the fire we helped to create will locate us. So here we are, finally paying for all those things in different forms – scarcity of food, scarcity of cash, lawlessness, loss of lives and properties, loss of jobs, mental and psychological disturbances, and insecurity.

I am happy the IGP of police, Adamu Mohammed, has enjoined the police officers to go back to duty, even though I am worried that he asked them to start defending themselves whenever they feel threatened. Hopefully, the return of the police will bring in some sanity. Maybe when they come back to work, the scarcity of cash as a result of non-working ATMs will be a thing of the past. Maybe distributors and traders will feel more at ease with moving their goods around the country. Maybe I will not be stuck in a gridlock for hours again.

MTN Group Made At Least $160 Million Gain On Its Jumia Investments

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MTN Group exited by selling all its stocks in Jumia: “The MTN Group has now fully exited its 18.9 percent investment in Jumia Technologies AG (Jumia), realizing a total consideration of approximately R2.3 billion (US$138 million). Yes, it sold  the remaining 18.9% investment for $138 million.

According to Bloomberg, MTN Group invested $243 million in Jumia: “MTN Group Ltd. is planning to sell part or all of its $243 million interest in Jumia Technologies AG as Africa’s biggest wireless carrier looks to pay down debt and enter new markets, according to people familiar with the matter”.

More so, according to GSMA, an industry organization, “in December 2013, MTN, together with Millicom and Rocket Internet, became a 33.3% stakeholder in Africa’s e-commerce and digital services company Jumia Group (formerly Africa Internet Group (AIG). MTN has since invested an additional $143 million in Jumia Group, increasing its stake to 41.4 percent.”

By the time Jumia went public, MTN held 29.7% of the company. The implication is this: MTN sold 11.7% during the IPO process. Jumia began trading at $14.50.

Key Jumia Shareholders and Nationalities, $Millionaires Created in Africa and Europe

Now, the interesting part: the recently sold 18.9% brought in $138 million. This implies that MTN sold the latest batch when Jumia cap was around $695 million. Running the numbers, it came down to $7 per share. Let us approximate that it was sold at half the IPO value. Also, the other part of the 29.7% (as at IPO date) was sold when Jumia has been falling. Because of the lockout period, MTN would not have sold when the stock was high. Possibly, it sold around the $7 window.

Here are the three sales buckets:

  • 18.9% for $138 million at about $7 per unit
  • 10.8% at about $7, which gives about $80 million
  • 11.7% during the IPO process at $14.50; that comes around $180 million

So, the total realized sales for MTN Group would be in the neighborhood of $400 million. MTN had invested $243 million. So, the company realized before tax and fees around $160 million.

*I have relied on public documents for this analysis; do not send me confidential financial statements as I do not use non-public documents in my articles. I am not a journalist that breaks news – I focus on the analysis of broken news! A good academic exercise! Tax people, do not rely on this to summon MTN.

 

MTN Sells Off its Entire Jumia Stake, Raking in $138 million

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The MTN Group announced that it has successfully exited Jumia, selling its remaining 18.9 percent stake and raising $138 million from the deal.

The announcement was made on Friday through MTN Group’s Q3 2020 financial report.

“The MTN Group has now fully exited its 18.9 percent investment in Jumia Technologies AG (Jumia), realizing a total consideration of approximately R2.3 billion (US$138 million).

“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,” the statement said.

Pan-African e-commerce unicorn Jumia became Africa’s first tech firm to list in New York in 2019, when its shares soared to give the company a market valuation of nearly $2 billion.

But it has so far failed to make a profit, and its shares have since fallen by two thirds, also partly driven by a short-seller casting doubt on its sales figures, according to Nasdaq.

It is not clear what MTN intends to do with the fund it raised from the sales, although there is a rumor the South African telecom giant is preparing to service part of its debt with it. The telco also announced it has fully exited localization of an 8 percent shareholding in MTN Zambia, with a net proceeds of R204 million.

The group said it also intends to sell 12.5% of its investment in MTN Ghana with a focus in local shareholding. The move will increase MTN Ghana’s free-float on the Ghana Stock Exchange (GSE) to 25%.

And as part of its sales plan, MTN said it intends to exit its 75% stake in MTN Syria and plans to sell its 20% shareholding in Belgacom International Carrier Services SA (BICS). All these led to the conclusion that the South African telecom giant is working to offset its debt.

MTN, who initially had a 40% stake in Jumia, and had sold most of it before the end of 2019, had in August, announced it’s planning to sell off its 18.9% stake in Jumia, and telecom tower company, IHS Towers.

However, the development signals more trouble for Jumia, who has been struggling to keep its unicorn status.

In April last year, Jumia became the first African tech company to list on the New York Stock Exchange, a move which saw its shares skyrocket and its valuation hitting $2 billion. But it failed to maintain the status following reports of quarterly losses as a result of poor sales. A short-selling article from Citron, and issues with partners aggravated the situation, sending its stock further low.

Following these events, Jumia lost its unicorn status in six months, and at the wake of the pandemic, its shares were sold for as low as $3.

The situation appeared to have triggered the exodus of its investors. In March, German technology investment group, Rocket Internet sold off its entire stake in Jumia.

Surprisingly, the e-commerce company recorded a rebound that saw its stock rose 142%, putting it back to its unicorn status. This was as a result of some changes in business framework, including the launch of Jumiapay.

However, the recovery story was disrupted when MTN announced in August its intention to sell off its shares. Jumia’s second quarter result showed tumbling numbers that put its shares back to its ordeal.

But again, in October, things started to take good turn for Jumia once again. The change has been attributed partly to Andrew Left’s change of attitude toward the troubled online store. Left, the Citron writer who had been a fierce critic of Jumia, started writing positive short-selling articles about Jumia in October. His change of heart is believed to have attracted investors once more.

Jumia shares have maintained stability in the past seven days, trading between $16-$19 and its market has moved up to $1.5 billion, according to Techpoint.

The e-commerce company is expected to announce its Q3 earnings on Nov. 10, and there is high expectation despite the negative pre-market impact MTN’s announcement has created. Jumia is trading around $17.5, with a current valuation of $1.35 billion.