Airtel Sells $200m Shares To TPG Fund

Airtel on Thursday said it sealed an agreement with TPG’s The Rise Fund to invest $200m in its mobile money business, Airtel Mobile Commerce BV.

AMC BV is the holding company for several of Airtel Africa’s mobile money operations and hopes to provide financial solutions to people who have limited access to banking infrastructure.

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AMC BV is “now intended to own and operate the mobile money businesses across all of Airtel Africa’s fourteen operating countries once the inclusion of the remaining mobile money operations under AMC BV is completed,” Airtel Africa said in a statement.
 

The transaction would allow Rise Fund to hold a minority stake in AMC BV upon completion, but Airtel Africa will continue to hold the remaining majority stake, the company said.

With the move, Airtel Africa is planning to explore the potential listing of the mobile money business within four years.

Airtel Africa said it is also holding discussions with other potential investors for a possible sale of minority investments into Airtel Money, up to a total of 25 per cent of the issued share capital of AMC BV.

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In view of the transaction, Airtel Africa’s mobile money business has been valued at $2.65bn on a cash and debt free basis.

Based on the agreement reached, $150m would be invested at first close, once the transfer of sufficient mobile money operations and contracts into AMC BV has been completed.

Another $50m would be invested at second close upon further transfers.

Airtel’s mobile money business which generated revenue of $110m in third quarter 2020 and $440m annualised also saw growth in transaction value rising by 53 per cent to $12.8bn and $51bn on an annual basis.

In 2021 alone, Airtel has added partnerships with Mastercard, Samsung, Asante, Standard Chartered Bank, MoneyGram, Mukuru and WorldRemit to expand both the range and depth of the Airtel Money offerings across the 14 countries where it operates.

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Raghunath Mandava, Chief Executive Officer of Airtel Africa, noted that the partnership with The Rise Fund would provide a substantial opportunity to bank the unbanked across the continent.

Mandava said, “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.”

Commenting on the development, Yemi Lalude, Partner at TPG 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.”

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