The top African e-commerce platform, Jumia Technologies AG, revealed intentions 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 development efforts throughout the continent.
Jumia is making this step in an effort to increase its market share and make investments in crucial fields including technology, shipping, and customer acquisition.
The company’s current share capital is registered at EUR 244,925,650.00, divided into 244,925,650 ordinary bearer shares with no par value.
The proposed rights issue will offer existing shareholders the opportunity to purchase additional shares at a discounted price, ensuring they can maintain their proportional ownership.
The initiative requires shareholder approval and is structured under German corporate law provisions, allowing the management board, with the supervisory board’s consent, to increase share capital within a five-year period.
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In June, Jumia’s shareholders authorized the management board to increase share capital by up to EUR 98,945,871.00 until June 2029.
Following a partial utilization of this authorization, Jumia can still issue an additional EUR 58,490,399.00 in new shares.
Existing shareholders will have the option to subscribe to new shares in proportion to their current holdings, allowing them to maintain their ownership stake. The rights issue price will be set at a discount to the market price, presenting an attractive investment opportunity.
Jumia’s management and supervisory boards will oversee the rights issue’s execution to ensure transparency and regulatory compliance.
The company has committed to providing regular updates to shareholders on the progress and impact of the capital increase.
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Jumia also on Tuesday released its financial statement for Q2 2024, showing that was able to cut down its operating loss by 8% in the quarter.
The company posted a $20.2 million operating loss in Q2 2024 compared with the $22.1 million it recorded in the same period last year.
Jumia’s revenue for the second quarter stood at $36.5 million down from $44 million recorded in the same period last year.
The e-commerce platform’s CEO, Francis Dufay, believes that the company’s strategy to cut its losses and move to profitability is working as envisaged.
According to him, Jumia’s deep understanding of the African e-commerce market as well as its unique asset base and strategy position the company for growth as it progresses on the path towards profitability.
