The top African e-commerce platform, Jumia Technologies AG, revealed plans on Tuesday to raise EUR 244 million ($268 million) through a rights issue as part of a plan to improve its financial standing and support its expansion efforts throughout the continent.
Jumia is taking this step to increase its market share and make investments in crucial fields including technology, shipping, and customer acquisition.
The present par value of the company’s shares, 244,925,650 ordinary bearer shares, make up its registered share capital of EUR 244,925,650.00.
The Rights Issue’s Mechanisms
To ensure that they may keep their proportionate ownership, the planned rights issue will allow current shareholders to buy more shares at a reduced price.
The initiative, which is governed by German corporate law regulations and needs shareholder approval, permits the management board to raise share capital within five years with the supervisory board’s agreement.
The management board of Jumia was permitted by the company’s shareholders in June to raise share capital by up to EUR 98,945,871.00 until June 2029.
After using this authorization partially, Jumia is still able to issue new shares for EUR 58,490,399.00.
Strategic allocation of funds
The money obtained from the rights issue will be used by Jumia for some important projects, including:
- Investing in the platform’s technological backbone will improve user experience and operational efficiency.
- Improving the logistics network to provide faster and more dependable delivery services.
- Increasing marketing efforts to gain new customers and keep existing ones.
- Strengthening the company’s balance sheet to ensure financial stability and flexibility.
Additional details of the offer
To retain their ownership position, present shareholders can subscribe for additional shares in the same proportion as their current holdings. A compelling investment opportunity will be presented by the rights issue price, which will be set below the market price.
To maintain openness and legal compliance, Jumia’s management and supervisory bodies will supervise the rights issue’s implementation.
The business has promised to keep shareholders informed on the status and effects of the capital increase regularly.
Jumia’s most recent financials
Jumia also disclosed its Q2 2024 financial results on Tuesday, revealing that it has reduced its operating loss by 8% throughout the quarter.
In Q2 2024, the company reported an operating loss of $20.2 million, down from $22.1 million during the same quarter the previous year.
Jumia’s revenue for the second quarter of this year was $36.5 million, as opposed to $44 million during the same time the previous year.
Francis Dufay, the CEO of the e-commerce platform, thinks the company’s plan to reduce losses and turn a profit is coming together as planned.
He claims that Jumia is well-positioned for growth as it moves closer to profitability thanks to its distinctive asset base, strategy, and in-depth knowledge of the African e-commerce sector.
