Pan-African telecommunications group, MTN, has announced that it has signed an agreement with Mastercard to sell a small stake in its fintech business worth $5.2 billion. The company revealed this in a statement on its half-year financial performance published on Monday. According to the group, the signing of the investment agreement should be done as soon as possible after the investigation.MTN further announced that the fintech business has implemented its rapid expansion plan in the first half of this year. He added that transaction value increased by 37% to 8.3 billion and 61 million active MoMo customers fueled the transaction. According to him, MTN Group's operating income increased by 15% to almost R108 billion in constant currency. The reason for this is the increase in revenue from data services of 24% and fintech services of 22%. Voice workers' income fell by 6% during the period. At the end of June 2023, the group had 292 million subscribers. This set of subscribers, 4% higher than in the same period last year, benefited from lower data rates and access to better broadband services.
While noting that the Group signed a commercial agreement with Mastercard to further drive the growth of the fintech business, MTN said: “Following the bespoke process to identify and potentially introduce strategic minority investors into MTN Group Fintech, we executed commercial agreements with Mastercard to support the acceleration and growth of our fintech business’s payments and remittance services. “MTN and Mastercard also signed a memorandum of understanding which provides for a minority investment by Mastercard into Group Fintech based on a total enterprise valuation of about US$5.2 billion for the business on a cash and debt-free basis. “The signing of the definitive investment agreements is expected to occur in the very near term as we approach the finalization of customary due diligence. “The closing of the investment will be subject to customary closing conditions.”
Providing insights on the Group’s financial performance for the half year 2023, MTN Group’s CEO Ralph Mupita said the Group delivered a resilient performance and made good strategic progress against a tough macro backdrop. “In South Africa, we were very encouraged by the improved network availability on the back of our power-resilience investment, resulting in a stronger Q2 23 performance than Q1 23,” he said. “By end-June, MTN South Africa’s network availability was more than 90% despite severe electricity shortages across the country. “In Nigeria, we delivered a very strong operational result, having navigated the cash shortages in Q1 23 and increased inflation,” Mupita said. “The policy changes implemented in Nigeria in Q2 23 have short-term negative impacts, but we see these as being very constructive for the investment climate in the medium to longer term,” Mupita said.
