MTN Nigeria Restructures Fintech Operations in N95.5bn Deal as Group Takes Majority Control of MoMo, YDFS
MTN Nigeria Communications Plc has announced a major restructuring of its fintech operations, involving the partial transfer of ownership of its digital financial services subsidiaries to its South African parent company, MTN Group, in a deal valued at N95.5 billion.
The transaction will see MTN Group acquire a 60 percent stake each in MoMo Payment Service Bank Limited and Y’ello Digital Financial Services Limited through its fintech subsidiary, MTN Group Fintech.
MoMo Payment Service Bank (MoMo PSB) operates as MTN’s mobile money platform in Nigeria, offering services such as deposits, transfers, payments, and digital wallets for individuals and small businesses via mobile and digital channels. Y’ello Digital Financial Services (YDFS), on the other hand, functions as a licensed super-agent network providing agency banking services, including cash deposits, withdrawals, and bill payments, primarily through the MoMo ecosystem.
Two-Phase Restructuring Plan
In an explanatory note, MTN Nigeria said the restructuring will be implemented in two phases. In the first phase, MTN Group Fintech will acquire a 60 percent stake in both fintech subsidiaries through a mix of newly issued shares and a secondary purchase of shares in MoMo PSB from MTN Nigeria.
The deal is based on an agreed valuation of N95.5 billion on an intra-group debt-free and cash-free basis, with an implied capital injection of N152.06 billion into the fintech businesses. This injection may be made in cash, non-cash consideration, or a combination of both.
Following this phase, MTN Nigeria will retain a 40 percent minority stake in both companies, maintaining partial ownership while reducing direct exposure.
The second phase involves the creation of a new financial holding company, to be named Fintech HoldCo. Under this structure, MTN Group Fintech will hold 60 percent, while MTN Nigeria will retain 40 percent.
Once regulatory approval is obtained from the Central Bank of Nigeria (CBN), Fintech HoldCo will consolidate full ownership of both MoMo PSB and YDFS by acquiring all remaining shares held by MTN Group Fintech and MTN Nigeria in the subsidiaries.
Strategic Rationale and Risk Distribution
MTN Nigeria said the restructuring is designed to distribute operational and financial risks more effectively across the Group. By transferring majority ownership to MTN Group Fintech, the company aims to reduce MTN Nigeria’s exposure to losses, regulatory pressures, and execution risks associated with its fintech operations.
The company also described the move as a way to allow MTN Group Fintech to assume a larger share of future capital requirements, particularly in a segment that has been described as loss-making in recent periods.
Shareholder Consideration and Prior Developments
The telecommunications company disclosed that shareholders will meet at an Annual General Meeting scheduled for April 30 to review and vote on the proposed transaction.
MTN Nigeria noted that the restructuring comes less than a year after it increased its ownership in MoMo PSB to 100 percent in August 2024, following the acquisition of a 7.17 percent stake previously held by Acxani Capital Limited.
Overall, the proposed arrangement marks a significant shift in MTN Nigeria’s fintech strategy, moving toward a more centralized group-led ownership structure while retaining minority participation in its digital financial services ecosystem.