MTN Group is set to spin off its fintech operations in Nigeria, Ghana, and Uganda by mid-2025, allowing Mastercard to acquire a minority stake. The process is more advanced in Uganda and Ghana, while Nigeria poses regulatory challenges. MTN’s fintech division is valued at $5.2 billion, with a planned investment from Mastercard of up to $200 million. Despite recent financial losses, MTN aims to boost its dividend payout, reflecting confidence in future growth.
MTN Group has formally announced its intention to spin off its financial technology (fintech) operations in Nigeria, Ghana, and Uganda by the first half of 2025. This strategic decision aims to allow Mastercard Inc. to acquire a minority stake in these expanding fintech units. MTN Chief Executive Officer Ralph Mupita disclosed these plans during an interview with Bloomberg, highlighting the necessity of separating the fintech businesses as a condition to finalize a prior agreement with Mastercard made in 2023.
The spin-off process is more developed in Uganda and Ghana, while Nigeria presents additional regulatory challenges. Mr. Mupita remarked that Nigeria faces “a bit more complexity with some more regulatory processes to work through.” Nevertheless, MTN is committed to ensuring the timely completion of the reorganization across all three markets.
Alongside its fintech expansion, MTN is evaluating network-sharing agreements, following established trends in European markets. Such agreements are anticipated to optimize infrastructure expenses and enhance service delivery for the company.
The agreement with Mastercard values MTN’s fintech division at approximately $5.2 billion. Under this deal, Mastercard is poised to invest up to $200 million in a minority stake. In a statement regarding the partnership, MTN emphasized that they are executing agreements with Mastercard to bolster the growth and development of their fintech business, facilitating payments and remittance services. This collaboration further includes signing a memorandum of understanding that outlines Mastercard’s minority investment, dependent on an enterprise valuation of about $5.2 billion.
Additionally, MTN, recognized as Africa’s leading telecommunications provider by revenue, reported a loss of 9.59 billion rand for the fiscal year ended December 31, 2024, which exceeded prior loss estimates. The company has also declared a dividend of 3.45 rand per share for the same period and plans to increase the dividend payout to a minimum of 3.70 rand per share for the current fiscal year, showing confidence in its financial outlook and growth potential.
In conclusion, MTN Group’s spin-off of its fintech operations in Nigeria, Ghana, and Uganda is a significant restructuring initiative aimed at facilitating Mastercard’s minority stake acquisition. Despite challenges in Nigeria’s regulatory landscape, MTN remains committed to the reorganization. The fintech division, valued at $5.2 billion, is set to enhance MTN’s strategic growth while the company also focuses on optimizing costs through potential network-sharing agreements. Such robust actions reflect MTN’s confidence in its future financial performance and expansion capabilities.
Original Source: nairametrics.com
