Interswitch Group, Nigeria’s largest payment provider with operations in Eastern Africa has called off its much awaited initial public offering.
The company said it will be suspending the IPO over US Dollar shortages that would hamper the final execution of the IPO. Nigeria has for over 11 months witnessed drought of Forex after its crude oil revenue fell by 70%. Activities of militants in the Niger Delta has compounded the revenue crisis beyond the government’s target for the year.
It would be recalled that Interswitch announced last year that it had engaged Bank of America Corp., Barclays Plc and Standard Bank Group Ltd to put together its IPO to raise USD1 billion.
Interswitch is owned by Helios Investment Partners LLP, a London-based private equity firm. The plan of the group was to use USD1 billion IPO to repay its shareholders who have been the ones carrying the bag all along.
Mitchell Elegbe, CEO of the group told Bloomberg that “The macroeconomic situation in Nigeria is the determining factor’’ He added that potential investors are “jittery’’ about the naira exchange rate and whether they will be able to buy foreign-exchange to get their money out of the West African country.
Interswitch had expanded its operations into East Africa with Kenya as its launchpad into the East African markets. Mitchell told Bloomberg that the IPO has been kept in view. He said the company will be looking at focusing on its expansion plans in East Africa- Kenya, Tanzania, Uganda and Gambia.
Interswitch Group is not the only company that will be shelving its IPO on the NSE. MTN Group, Africa’s largest mobile carrier suggested it will be suspending its IPO on the NSE as a result of potential legal challenges with the Nigerian government.
A spokesperson for MTN Group said in December that ““MTN remains committed to the listing and will proceed with the share sale when it’s legally and commercially possible”.
