Airtel Africa mulls listing of mobile money business
Airtel Africa Plc has said it will explore potential listing of its mobile money business within four years.
The telecommunications company said this on Thursday while announcing the signing of an agreement under which The Rise Fund, the global impact investing platform of an alternative investment firm TPG, would invest $200 million in Airtel Mobile Commerce BV.
AMC BV is a wholly owned subsidiary of Airtel Africa, a provider of telecommunications and mobile money services, with a presence in 14 countries across Africa.
According to a statement, the transaction values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt free basis.
It said The Rise Fund would hold a minority stake in AMC BV upon completion of the transaction, with Airtel Africa continuing to hold the remaining majority stake.
The statement said, “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.
“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 telco said the proceeds from the transaction would be used to reduce group debt and invest in network and sales infrastructure in the respective operating countries.
The Chief Executive Officer 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.”
Yemi Lalude, partner at TPG who leads Africa investing for The Rise Fund, said, “Financial inclusion is a global issue that is most acute in Africa. Through Airtel Money, Airtel Africa has built a unique platform that is closing the gap between traditional financial institutions and the millions of unbanked Africans across the 14 countries where Airtel Africa operates.
“We look forward to working with Airtel Africa to enhance their mobile money services, broaden its use cases, and grow into new markets. With this investment in Airtel Africa’s mobile money operations, we are excited to expand The Rise Fund’s global fintech portfolio and continue to deepen our focus on improving financial inclusion in Africa and around the world.”
