Kinnevik writes down its investment in Konga by USD13.8 million

Kinnevik

Kinnevik AB, the Swedish investor with a 34% stake in Konga, one of Nigeria’s major eCommerce company, said the value of its investments in Konga, Global Fashion Group, Home 24, Westwing, Linio must have decreased by SEK517 million as at December 31st, 2016.

This value is approximately USD57 million using the real time exchange rate. The disclosure was contained in its full year report sent out to all its shareholders earlier today.

Kinnevik gave rationale for its assumption that the value of Kinnevik’s unlisted investee companies may increase or decrease due to a number of different factors, of which changes of trends in the stock markets is one. In the process of valuing its unlisted holdings, Kinnevik considers a number of factors such as relative valuations of comparable publicly traded companies, the operational and financial performance of the respective investee company, and the valuations resulting from transactions in the respective investee company’s shares.

“Any changes in these factors have an impact on the total value. For companies that are valued based on multiples (i.e. Global Fashion Group, Home 24, Westwing, Linio, and Konga), a decrease in the multiples by 10% would at 31 December 2016 have decreased the value by SEK517m”.

Kinnevik also disclosed that its total investment in Konga till date stood at SEK257 million.

As a result of the decrease or writedown in the value of its 34% stake, the company said the “fair value” as at 31th of December, 2016 fell to SEK133 million. This is approximately USD13.8 million using the real time Forex rate.

Kinnevik disclosed it had a total receivables of SEK26 million from Konga compared to SEK6 million as total receivables in 2015.

Konga is part of the unlisted companies in the portfolio of Kinnevik with Linio, Global Fashion Group, Home24 and Westwings. These however are investee companies from the portfolio of Rocket Internet, the parent company of Jumia Nigeria.

Kinnevik is a co-investor in Konga alongside Naspers Limited, a South African technology investor with about 40% stake in the company.

Note: USD1 = SEK8.93