E-commerce company, Jumia, placed its shares in the market as the company seek funds for operational use following a $6 million pay off to investors who sued Jumia for misleading them prior to the company's Initial Public Offering (IPO) listing on the New York Stock Exchange (NYSE).
In a statement seen by AllNews, Jumia said it organised what it called “at the market” offering, placing 7,969,984 ADSs on sale. It was gathered that Jumia raised $243.2 million from the sale of the shares which were sold at an average price of $30.51 per ADS.
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However, proceeds from the fundraising is placed at $231.4 million after commissions and expenses. The fundraising was done alongside Citigroup Global Markets Inc., which acted as Jumia’s agent. Jumia said the funds will be utilised for general corporate purposes.
"All 7,969,984 ADSs offered by Jumia have been sold at an average price of $30.51 per ADS, generating aggregate gross process of $243.2 million. Proceeds, net of commissions and expenses, are expected to be $231.4 million. Jumia intends to use the net proceeds from this offering for general corporate purposes." Jumia said in a statement.
The share sale didn't hold in Nigeria, as Jumia is only listed on the New York Stock Exchange, not the Nigerian Stock Exchange. While the company operates largely in Africa, with much of its income coming from Nigeria, Jumia targeted foreign investors with its IPO - hence the NYSE listing.
The fundraising comes three months after AllNews reported Jumia has settled its investors that sued the company for hiding vital information ahead of its IPO. Jumia will pay $5 million and $1 million to settle the case, but according to the company, the financial settlement doesn't mean Jumia is admitting wrongdoing.
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"As previously disclosed, several putative class action lawsuits were filed in the U.S. District Court for the Southern District of New York and the New York County Supreme Court against us and other defendants, including current and former members of our supervisory and management boards.
"The cases assert claims under federal securities laws based on alleged misstatements and omissions in connection with and following our initial public offering. On August 11, 2020, we reached an agreement to fully resolve all of the actions, subject to standard conditions including court approval."