The telecommunication giant Airtel Africa receives $200m into the mobile money arm of the organization. Mastercard invested $100 million in Airtel Mobile Commerce BV (AMC BV), Airtel Africa’s mobile money business, three months ago. It had just gotten $200 million from TPG’s Rise Fund two weeks before.
Qatar Holding LLC, a unit of the Qatar Investment Authority (QIA), with over $300 billion in assets, is claimed to be the investor. They plan to invest this large sum of money by purchasing Airtel Africa’s shares on the secondary market.
AMC BV is an Airtel Africa subsidiary that serves as the holding company for several of the corporation’s mobile money businesses in 14 African countries, including Kenya, Uganda, and Nigeria. The mobile money division is one of the continent’s leading financial service providers. It offers users mobile wallets, international money transfer support, loans, and virtual credit cards.
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According to a statement released by the firm, the investment proceeds will be utilized to reduce debt and invest in network and sales infrastructure across the telecom operating countries. The purchase will be completed in two installments, with the first commitment of $150 million expected in August. The remaining $50 million will be invested at the second close.
Airtel Africa states that QIA will own a minority party in the company while it retains the majority. On cash and debt-free basis, Airtel Africa’s value is at $2.65 billion. This time, however, QIA has the authority to select a director to AMC BV’s board of directors, as well as “some usual information and minority protection rights.”
The most recent Airtel Africa report for Q1 2021 shows hints of growth. The telecoms operator witnessed a 53.7 percent increase in revenue year over year, fueled by a 24.6 percent increase in subscriber base to 23.1 million. The transaction value increased by 64.4 percent to $14.7 billion ($59 billion yearly), while EBITDA increased by 48.8% to $60 million ($240 million annualized). In addition, the company made $124 million in revenue ($496 million on an annual basis), with $185 million in profits before taxes in Q1 2021.
According to QIA CEO Mansoor bin Ebrahim Al-Mahmoud, the sovereign wealth fund’s investment in Airtel Africa would help enhance financial inclusion in Sub-Saharan Africa.
“Airtel Money is critical in stimulating economic activity, especially for individuals who lack access to traditional banking services. We are confident in the goal and intend to intensify our efforts in the coming year”
Airtel Africa first announced in February that it intended to sell a minority investment in AMC BV to acquire cash and dispose of some assets. It raised $500 million from outside investors and sold communications towers in Madagascar and Malawi to Helios Towers for $119 million the following month.