Opay Ipo 'disaster' As Chinese Regulatory Inquiry Catches Dealmakers Off Guard

The News

Bankers and advisers were “shocked” when OPay abruptly pulled its $304 million US IPO just hours after pricing on Oct. 30, after a Chinese regulatory inquiry forced the Nigeria-focused fintech to abandon its planned New York Stock Exchange debut, people close to the transaction told Semafor.

Speaking on condition of anonymity, they said the advisers were caught off guard by the intervention, with one calling the outcome “a disaster for everyone.” The inquiry was unexpected because OPay, headquartered in Singapore, generates 90% of its revenue in Nigeria and has no operating business or revenue in mainland China. But its founder, Chinese billionaire Zhou Yahui, remains a key figure in its ownership.

OPay, its advisers, and the banks involved have declined to comment further on the transaction.

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In its prospectus filing, the company advised investors of the risk with Chinese regulators even though it does not operate there. OPay acknowledged that there were uncertainties over whether it might need approval from the authorities in Beijing to list in the US. However, citing advice from its Chinese legal counsel, the company said it did not believe it was required to obtain approval from the China Securities Regulatory Commission .

The deal’s earlier documentation also listed China International Capital Corporation’s Hong Kong securities business among the transaction’s bankers, alongside Citigroup, Deutsche Bank, and South Africa’s Standard Bank. CICC was subsequently absent from the list of underwriters accompanying Friday’s announcement, a detail that may have been an early indication of complications.

Those close to the deal also pushed back against suggestions that the IPO had been priced too aggressively. OPay set 16 million American depositary shares at $19 each, the bottom of its $19-$21 target range. The shares were subsequently indicated to open below the offering price, but the company withdrew before trading began.

Step Back

OPay said in its announcement that the inquiry concerned a jurisdiction “immaterial to the Company’s core business operations” and that it expected the matter to be resolved satisfactorily in the near future. It has not announced a revised timetable for a listing.

For African investors and technology founders, the hope will be that OPay’s setback proves an isolated complication rather than another obstacle to attracting international public-market capital. After years of difficult fundraising conditions, the continent’s venture industry needs successful exits and public listings to persuade investors that its technology businesses can deliver returns at scale.

Notable

• OPay’s US IPO abrupt withdrawal has cast a shadow over African fintech.