Africa’s most valuable company, Naspers Limited said it is cashing out about 190 million units of its shares in Tencent Holdings.
Naspers said it will sell the shares to investment funds to raise about $10.6 billion in value.
Naspers said in a statement that it will sell:
Shares, equal to approximately 2% of Tencent’s total issued share capital, which would reduce its stake in Tencent from 33,2% to 31,2 (the Transaction). The funds will be used to reinforce Naspers’ balance sheet and will be invested over time to accelerate the growth of Naspers’ classifieds, online food delivery and fintech businesses globally, and to pursue other exciting growth opportunities when they arise.
Naspers also announces that it will not sell further Tencent shares for at least the next three years, in line with its long-term belief in Tencent’s business.
Shareholders of Naspers are advised that the Transaction, if successfully implemented, is likely to constitute a category 2 transaction in terms of the Listing Requirements of the Johannesburg Stock Exchange and may have a material effect on the price of Naspers’ securities. Accordingly, Naspers shareholders are advised to exercise caution when dealing in Naspers’ securities until a further announcement is made.
Naspers is listed on the Johannesburg Stock Exchange, JSE, but it has a global reach across Africa, Asia Pacific, North America and Europe.
Analysts who cover Naspers said the company needed to cash out some funds from its $175 billion worth of investment in Tencent in order for it to have money to fund its operations going forward giving the below-par performance of many of its startups across the world.
However, Naspers sojourn across Africa and Europe have not yielded any results. The company recently disposed of its entire stake in Konga, an eCommerce company it invested in alongside Sweden’s Kinnevik AB.
Naspers’ investments in Konga was so much impaired that it was reported that it sold its entire stake alongside that of Kinnevik for a meager $10 million. The figure was also said to be far lesser as many claimed the actual sale price was far lesser.
Naspers had tried several times to expand into Nigeria with its various startups and Internet companies. In 2017, Naspers closed down WeChat’s office in Nigeria ending a three-year effort to compete with Facebook’s WhatsApp and BlackBerry Messenger, BBM. The company also lost a lot of money when it invested in Mocality.com, a yellow-page website, Dealfish
Naspers also closed down Markaforni, a Turkish eCommerce company it invested in back in 2008.
For an Internet giant with investment across TV and entertainment, it is very interesting to note that the huge success it has achieved only came from one source- Tencent Holdings.