Three months ago, MasterCard invested $100 million in Airtel Mobile Commerce BV (AMC BV), Airtel Africa’s mobile financial services company. This was two weeks after he also received $200 million from the Rise TPG fund.
African Telecom announced today that it has secured another investment for its mobile financial arm. the investor? Qatar Holding LLC, a subsidiary of the Qatar Investment Authority (QIA), is the sovereign wealth fund of the State of Qatar with assets of more than $300 billion. The Middle East company will invest $200 million in AMC BV through a secondary purchase of Airtel Africa shares.
AMC BV is a subsidiary of Airtel Africa and the parent company of several Airtel Africa mobile money transfer operations in 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 with access to mobile wallets, support for international money transfers, loans and virtual credit cards.
According to a statement issued by the telecom operator, the investment resources will be used to reduce debt, invest in network infrastructure and sales in the respective operating countries. The deal will close in two tranches: an investment of $150 million in the first close, likely in August. The remaining $50 million will be invested in the second closing.
Airtel Africa claims that the Qatar Investment Authority will have a minority stake while still owning a majority stake. This deal still values Airtel Africa at $2.65 billion in cash and debt-free like other deals. However, what is different this time is that the Qatar Investment Authority has the right to appoint a director to the board of directors of AMC BV and “certain customary information and minority protection rights”.
Airtel Africa’s latest report for the first quarter of 2021 shows signs of growth. The telecom operator saw revenue growth of 53.7% year-on-year, driven by 24.6% growth in its customer base to reach 23.1 million customers. Transaction value increased 64.4% to $14.7 billion ($59 billion annually); EBITDA was $60 million ($240 million annually) with a margin of 48.8%. The company also generated revenue of $124 million ($496 million annually), while its annual pre-tax profit for the first quarter of 2021 was $185 million.
Mansour bin Ibrahim Al Mahmoud, CEO of the Qatar Investment Authority, said the sovereign wealth fund’s investment in Airtel Africa will help boost financial inclusion in sub-Saharan Africa. “Airtel Money plays an important role in facilitating economic activity, even for customers who do not have access to traditional financial services. We firmly believe in their mission to expand these efforts in the coming years.
In February, Airtel Africa announced for the first time that it wanted to sell a minority stake in AMC BV to raise cash and sell some assets. The following month, it sold telecom towers in Madagascar and Malawi to Helios Towers for $119 million and raised $500 million from outside investors.
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