But the company wants to sell its increased stake as soon as it can.
Opera the consumer internet brand and developer of the eponymous web browser has increased its stake in OPay to 9.5% from 6.4%. This follows the conclusion of the 2022 sale of Nanobank for $127 million.
In February this year, Nanobank sold the majority of its business in Asia to OPay in exchange for OPay shares to an unnamed PE firm. Prior to this, Opera, the Oslo-headquartered consumer internet group held 42% of Nanobank, a lending business it had formed by combining Opera’s microlending business with Mobimagic’s point-of-sale business.
As mentioned earlier, Opera sold off its stake in Nanobank for $127.1 million in cash spread over 8 quarterly instalments in 2022. But earlier this year, Opera and the third-party buyer settled the internet brand’s receivable from the sale of Nanobank for OPay shares instead of quarterly cash payments that would have been paid through Q2 2026.
The result of this all-share transaction was that Opera’s stake in Opay increased to almost 10%.
By choosing OPay shares instead of cash, Opera settled for $35.9 million less than the book value of its investment in Nanobank, leaving the internet brand with a net fair value of $76.3 million as of year-end 2022. The company said it considered this, “to be reflective of the underlying fair value of its Nanobank receivable as of year-end.”
“The settlement was based on the valuation applied in the transaction as well as an estimate for the value of Nanobank’s remaining business. Opera has stepped into the relevant provisions of the sales agreement, including potential adjustments depending on the business performance. Consequently, Opera will report the value of its increased OPay ownership based on a weighted set of scenarios for the performance of the sold business,” the company statement reads.
Further terms of the equity swap were not disclosed thus it is not possible to determine at what valuation the transaction was priced. However it is an interesting turn to the story when you consider that in June 2021, two months before Opera and Mobimagic created the Cayman Islands-headquartered Nanobank, Opera sold off almost 30% of its former stake in Opay for $31 million.
Opera does not appear to want to hold on to its stake in OPay. It has marked its OPay ownership as ‘held for sale’, noting that “OPay continued its strong growth trajectory through 2022, giving us comfort in the ultimate marketability of our increased ownership stake.”
OPay was founded in 2018 by Opera Norway AS Group, which is owned by Shenzhen-listed Kunlun Tech Co., Ltd. That Opera the company which founded OPay owns so little of OPay may be surprising. A possible explanation is that Opera’s stake in OPay may have been severely diluted in the funding rounds through which the firm raised $570 million (per Crunchbase). The firm was last valued at $2 billion.
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