An affiliate of Qatar Investment Authority- Qatar Holding LLC, has signed an agreement with Airtel Africa to invest $200 million in one of its subsidiaries, Airtel Mobile Commerce BV (‘’AMC BV’’) which serves as the mobile money operations arm of the latter.
This is according to a notice sent to the Nigerian Exchange Group Limited (NGX) and seen by naijabusiness.com.ng
According to the disclosure, Qatar Invest Authority (QIA) will invest $200m through a secondary purchase of shares in AMC BV from Airtel Africa. The transaction will close in two stages: $150m will be invested at first close, subject to customary closing conditions, including necessary regulatory filings, with $50m to be invested at second close once further transfers of certain mobile money operations and contracts into the AMC BV perimeter have been completed. The Transaction first close is expected in August. From first close, QIA will be entitled to appoint a director to the board of AMC BV and to certain customary information and minority protection rights.
Upon the completion of the deal, QIA will hold a minority stake in AMC BV, while Airtel Africa continues to hold majority stake.
What will Airtel Africa use the $200m proceeds of the deal for?
Findings by naijabusiness.com.ng gathered that Airtel Africa will use the proceeds from the transaction to reduce the overall group’s debt and invest in network and sales infrastructure in the respective operating countries. In light of this, it is anticipated that Airtel Nigeria, being one of the operating subsidiaries will be positively impacted by this development, however, the extent or degree by which the recent development will affect it is yet o be ascertained as at the period of writing this.
What you should know about Airtel Mobile Money Business.
Airtel Africa, a leading provider of telecommunications and mobile money services, with a presence in 14 countries across Africa, conducts its mobile money business through a platform known as Airtel Mobile Commerce BV (AMC BV).
The AMC BV valued at $2.65 billion on a cash and debt free basis, supervises mobile money businesses across all of Airtel Africa’s fourteen operating countries. In the most recent financial reports released by Airtel Africa, AMC BV delivered a strong operational performance. ITt reported a 57% increase in its revenue to $124m, and underlying EBITDA of $60m at a margin of 48.8%.
Commenting on the recent development, the CEO of Airtel Africa, Raghunath Mandava, said: “With today’s announcement we are pleased to welcome QIA as a prospective investor in our mobile money business, joining both Mastercard and TPG’s The Rise Fund as a further partner to help us realise the full potential from the substantial opportunity to bank the unbanked across Africa.”
On the other hand, the CEO of QIA, Mansoor bin Ebrahim Al-Mahmoud, said: “We are delighted to build on our support of Airtel Africa in promoting financial inclusion to the large and growing population of 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.”