Nigeria’s Interswitch in talks with Anchor Investors Ahead of IPO

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By Loni Prinsloo and Myriam Balezou

London stock offering could kick off as soon as November
Company also weighing a sale, though IPO is preferred option

Interswitch, a Nigerian-based payments business, is in talks with potential anchor investors as it ramps up preparations for a potential London initial public offering, people familiar with the matter said.

The company is planning to kick off the share sale as soon as November, the people said, asking not to be identified because the discussions are private. An IPO could value the company at as much as $1.5 billion, Bloomberg News has reported.

No agreements have been reached, and the structure of any deal is still being deliberated by Interswitch, they said. Interswitch, which is majority owned by Helios Investment Partners, is also considering a sale, though it prefers a stock-market listing, the people said.

Roping in anchor investors would help drum up demand for Interswitch’s listing and buoy its valuation at a time when some fund managers are staying away from the U.K. stock market amid Brexit uncertainties. Middle Eastern payments processor Network International Holdings Plc brought in Mastercard Inc. as a cornerstone investor for its April IPO. It’s become one of London’s best-performing major listings this year, gaining 33% since its debut.

Mastercard also agreed to invest 50 million euros ($55 million) in Nigeria-focused e-commerce firm Jumia Technologies AG ahead of the latter’s New York IPO in April.

John Maguire, Interswitch’s chief financial officer, declined to comment on details of the IPO plans. A representative for Helios also declined to comment.
Debt Plans

Strategists at firms including JPMorgan Chase & Co. have been advising clients to steer clear of the U.K. market until there’s more political clarity. London’s benchmark FTSE 100 is up 7.5% so far in 2019, falling behind a 16% rally in the Euro Stoxx 50 index and a 19% surge in the S&P 500 index over the same period.

Interswitch also aims to raise about 30 billion naira ($83 million) selling bonds, with the first tranche of 20 billion naira planned for the next two years, Maguire said by phone Monday from Lagos. Proceeds will be used to fund business growth as it applies for a mobile-payments license from Nigeria’s central bank, he said.

The company has appointed FBNQuest Merchant Bank Ltd. and Stanbic IBTC Holdings Plc as lead financial advisers for the debt offering and has filed an application with Nigeria’s Securities and Exchange Commission, according to Maguire.

Helios Towers, another Africa-focused company backed by Helios Investment, is also preparing to kick off its London IPO as early as this month, people familiar with the matter have said. JPMorgan, Citigroup Inc. and Johannesburg-based Standard Bank Group Ltd. have been mandated to work on the Interswitch share sale, and the company will also have a local listing in Nigeria, the people had said.

Interswitch pulled earlier plans to list in 2016 after the price of crude oil fell dramatically, causing a contraction in Nigeria’s economy. An uptick in growth may accelerate payments between companies and thus revenues at payment-services providers.

— With assistance by Roxanne Henderson, Blaise Robinson, Emele Onu, and Ksenia Galouchko

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