14 April 2021
Airtel Africa, the telecom and mobile money services provider, has signed an agreement under which The Rise Fund, the global impact investing platform of alternative investment firm TPG, will invest US$200m in Airtel Mobile Commerce BV (AMC BV).
The operator has a presence in 14 countries across Africa, while AMC BV 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 footprint.
Airtel Africa provides telecom and mobile money services, primarily in east, central and west Africa.
The transaction values Airtel Africa’s mobile money business at US$2.65bn and The Rise Fund will hold a minority stake in AMC BV upon completion of the transaction, with Airtel Africa continuing to hold the remaining majority stake.
It is also the latest step in the group’s pursuit of strategic asset monetisation 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 statement says.
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,” the statement adds.
The Transaction is expected to reach first close over the next three to four months. From first close The Rise Fund will be entitled to appoint a director to the board of AMC BV and to certain customary information and minority protection rights.
“In line with our vision of enhancing financial inclusion, Airtel Africa offers a unique digital mobile financial services platform under the Airtel Money brand,” said Raghunath Mandava, CEO of Airtel Africa. “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.”
This 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.
Airtel Africa is headquarted in London, United Kingdom, and is a subsidiary of Indian telecom services company Bharti Airtel. The former’s subsidiaries, include Airtel Kenya, Airtel Uganda and Airtel Malawi.
