MTN Nigeria has announced plans to sell a 60 per cent stake in each of its two fintech subsidiaries to MTN Group, its South African parent company, in a deal valued at ₦95.5 billion.
The two companies involved are MoMo Payment Service Bank Limited (MoMo PSB), which offers deposits, payments, transfers and digital wallets to individuals and small businesses, and Y’ello Digital Financial Services (YDFS) Limited, a licensed super-agent that provides agency banking services including cash deposits, withdrawals and bill payments. YDFS operates through the MoMo network.
MTN Nigeria described the transaction as a restructuring exercise that will reduce its exposure to what it acknowledged are “loss-making” fintech operations.
The deal will be executed in two phases. In the first, MTN Group Fintech, a subsidiary of MTN Group, will acquire the 60 per cent stake through a combination of new share issuance by the fintech companies and a secondary acquisition of shares in MoMo PSB from MTN Nigeria. The agreed valuation of ₦95.5 billion implies a total capital injection of ₦152.06 billion, payable in cash, non-cash consideration, or a combination of both. MTN Nigeria will retain a 40 per cent stake in each company.
The second phase involves the creation of a financial holding company, to be named Fintech HoldCo, which will be 60 per cent owned by MTN Group Fintech and 40 per cent by MTN Nigeria. Fintech HoldCo will then acquire all shares held by both parties in MoMo PSB and Y’ello Digital, ultimately becoming their sole owner — subject to approval from the Central Bank of Nigeria.
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“Subject to obtaining the approval of the CBN, Fintech HoldCo will become the 100% owner of the shares in the Fintech Companies,” MTN Nigeria said in an explanatory note published on Tuesday.
MTN Nigeria also said the restructuring will distribute operational risks more broadly, enabling MTN Group Fintech to share in future capital risks, including losses, regulatory obligations and execution challenges.
The company will also hold an annual general meeting on April 30th, where it will ask for shareholders’ approval.
The announcement follows a move in August 2024 in which MTN Nigeria acquired the 7.17 per cent stake held by Acxani Capital Limited in MoMo PSB, bringing its total ownership of the subsidiary to 100 per cent at the time.