MTN Group to take majority stakes in MoMo, Y’ello Digital in N96bn restructuring deal

MTN Nigeria has disclosed that its parent firm, MTN Group, plans to acquire a 60 percent stake in both MoMo Payment Service Bank Limited and Y’ello Digital Financial Services (YDFS) Limited as part of a major fintech restructuring.

MoMo operates as a payment service bank, offering services such as deposits, transfers, payments, and digital wallets to individuals and small businesses across Nigeria through mobile-driven platforms. Meanwhile, Y’ello Digital functions as a licensed super-agent, delivering agency banking services like cash deposits, withdrawals, and bill payments via an extensive agent network.

YDFS currently runs through the MoMo ecosystem, linking both operations within MTN Nigeria’s broader fintech strategy.

In a statement released on Tuesday, MTN Nigeria explained that the proposed transaction is valued at N95.5 billion and is aimed at reducing its exposure to loss-making fintech ventures.

The company noted that the deal will be executed by MTN Group Fintech, another subsidiary of MTN Group, and will unfold in two phases.

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Under the first phase, MTN Group Fintech will acquire 60 percent equity in both fintech companies through a mix of newly issued shares and the purchase of existing shares in MoMo from MTN Nigeria. The deal is based on an agreed valuation of N95.5 billion on a debt-free, cash-free basis, implying a capital injection of about N152.06 billion into the businesses. MTN Nigeria will retain the remaining 40 percent stake.

The second phase involves the creation of a financial holding company, Fintech HoldCo, which will be jointly owned, with MTN Group Fintech owning 60 percent and MTN Nigeria getting 40 percent stake.

Following regulatory approval from the Central Bank of Nigeria (CBN), Fintech HoldCo will ultimately take full ownership of MoMo and Y’ello Digital by acquiring all shares held by both MTN Group Fintech and MTN Nigeria.

MTN Nigeria added that shareholders will deliberate on the proposed transaction at its annual general meeting (AGM) scheduled for April 30.

According to the telco, the restructuring is designed to spread operational and financial risks, allowing MTN Group Fintech to absorb a larger share of future capital requirements, regulatory obligations, and execution risks tied to the fintech units.

The development follows MTN Nigeria’s August 2024 acquisition of a 7.17 percent stake in MoMo from Acxani Capital Limited, a move that brought its ownership of the payment service bank to 100 percent prior to this planned restructuring.