Airtel Africa Plc on Thursday announced the signing of an agreement with The Rise Fund, the global impact investing platform of leading alternative investment firm TPG, which is investing $200 million in Airtel Mobile Commerce (AMC).
AMC is currently the holding company for several of Airtel Africa’s mobile money operations; and is now intended to own and operate the mobile money businesses across all of Airtel Africa’s fourteen operating countries.
In a notification at the Nigerian Stock Exchange (NSE), Airtel said it is also considering listing its mobile money business on a stock exchange in the next four years.
According to the telecom company, the transaction is valued Airtel Africa’s mobile money business at $2.65 billion on a cash and debt free basis.
The Rise Fund is expected to hold a minority stake in AMC BV upon completion of the transaction, with Airtel Africa continuing to hold the remaining majority stake.
The statement read in part, “The Transaction is subject to customary closing conditions including necessary regulatory filings and approvals, as necessary, and the inclusion of specified mobile money business assets and contracts into AMC BV.
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“The Transaction is the latest step in the Group’s pursuit of strategic asset monetization and investment opportunities, and it is the aim of Airtel Africa to explore the potential listing of the mobile money business within four years.
“The Group is in discussions with other potential investors in relation to possible further minority investments into Airtel Money, up to a total of 25% of the issued share capital of AMC BV. There can be no certainty that a transaction will be concluded or as to the final terms of any transactions.
“The proceeds from the Transaction will be used to reduce Group debt and invest in network and sales infrastructure in the respective operating countries.”
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The CEO of Airtel Africa, Raghunath Mandava, said, “In line with our vision of enhancing financial inclusion, Airtel Africa offers a unique digital mobile financial services platform under the Airtel Money brand. In most of our markets there is limited access to traditional financial institutions, and little banking infrastructure, with less than half of the population having a bank account across sub-Saharan Africa.
“Our markets therefore afford substantial market potential for mobile money services to meet the needs of the tens of millions of customers in Africa who have little or no access to banking and financial services, and this demand is driving growth.”
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