Dubai, NFAPost: Airtel Mobile Commerce BV (AMC BV), the mobile money business of telecom Airtel Africa, secured $200 million investment for its mobile money arm from Qatar Holding LLC, an affiliate of the Qatar Investment Authority (QIA).
The Middle Eastern corporation is set to invest $200 million into AMC BV through a secondary purchase of shares from Airtel Africa.
AMC BV is an Airtel Africa subsidiary and the holding company for several of Airtel Africa’s mobile money operations across 14 African countries, including Kenya, Uganda and Nigeria. The mobile money arm operates one of the largest financial services on the continent. It provides users access to mobile wallets, support for international money transfers, loans and virtual credit cards.
It is interesting to note that Airtel Mobile Commerce BV (AMC BV) already raised $100 million from Mastercard and received $200 million from TPG’s Rise Fund two weeks back.
According to a statement released by the telecoms operator, the proceeds of the investment will be used to reduce debt and invest in network and sales infrastructure in operating countries. The deal will close in two tranches — $150 million invested at the first close, most likely in August. The remaining $50 million will be invested at the second close.
Airtel Africa claims QIA will hold a minority stake while it continues to hold the majority stake. This transaction still values Airtel Africa at $2.65 billion on a cash and debt-free basis. However, what’s different this time is that QIA is entitled to appoint a director to AMC BV’s board and “to certain customary information and minority protection rights.”
Airtel Africa’s Q1 2021 performance shows signs of growth as the telecoms operator saw year-on-year revenue growth of 53.7%, pushed by 24.6% growth in customer base to 23.1 million. The company’s transaction value went up 64.4% to $14.7 billion ($59 billion annualised), and EBITDA stood at $60 million ($240 million annualized) at a margin of 48.8%. The company also generated $124 million in revenue ($496 million annualized), while its profits before tax for Q1 2021 stood at $185 million.
QIA CEO Mansoor bin Ebrahim Al-Mahmoud said the sovereign wealth fund’s investment in Airtel Africa would help promote financial inclusion in sub-Saharan Africa. “Airtel Money plays a critical role in facilitating economic activity, including for customers without access to traditional financial services. We firmly believe in its mission to expand these efforts over the coming years,” said Mansoor bin Ebrahim Al-Mahmoud.
It is interesting to note that Airtel Africa had decided to sell a minority stake in AMC BV to raise cash and sell off some assets in the beginning of the year. As part of its restructuring strategy, the company sold telecommunication towers in Madagascar and Malawi to Helios Towers for $119 million and raised $500 million from outside investors.
