It has been a busy 4 months for Airtel Africa. The African telecoms giant has been selling off parts of its business to prospective investors from all over the world. The company first sale was a minority stake of its mobile business in the order of $200 million to Texas-based TPG via its investment arm The Rise Fund.
Two weeks later the Bharti Airtel subsidiary received an additional $100 million for a piece of its mobile money arm. The investor, global payments provider Mastercard, now owns 3.775% of London listed AMC BV.
This week Airtel Africa again secured further investments in the order of $200 million this time from a Middle Eastern Corporation, Qatar Holding LLC. The investment affiliate of the State of Qatar’s sovereign wealth fund, Qatar Investment Authority (QIA), worth over $300 billion will close the deal in two phases according to a statement released by Airtel Africa.
The first will be $150 million invested by August with the remaining 50 million to be invested at the second close.
This investment will grant QIA only a minority stake in Airtel Africa as the telecoms giant is valued at a whopping $2.65 billion on a cash and debt-free basis. However contrary to previous investment deals, QIA will have the right to appoint a director to Airtel Africa’s mobile operation AMC BV’s board, this will also include “certain customary information and minority protection rights.”
AMC BV is the holding company for Airtel Africa’s mobile money arm, with operations across 14 African countries including Nigeria. Kenya and Uganda.
According to CEO of QIA, Mansoor bin Ebrahim Al-Mahmoud is geared to helping promote financial inclusion in 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,” he said.
These deals represent Airtel’s commitment to follow up on their February announcement to sell off a minority stake of its mobile money business so as to ‘raise cash and sell off some assets.’
Talking about the company’s deal with MasterCard, CEO of Airtel Africa Raghunath Mandava gave a little insight into the firm’s strategy.
“This is a continuation of our strategy to increase the minority shareholding in our mobile money business with the further intention to list this business within four years. We are significantly strengthening our existing strategic relationship with Mastercard to help us realise the full potential from the substantial opportunity to improve financial inclusion across our countries of operation.”
Airtel Africa’s investment pull cannot be brought down solely to its size. The company has posted some pretty impressive results over recent months. Their Q1 report for 2021 shows strong signs of growth with year-on-year revenue growth of 53.7% due to a 24.6% growth in their customer base to an impressive 23.1 million. Actual Q1 revenues generated were $124 million yielding a pre-tax profit of $185 million. The firm’s transaction value also went up by 64.4% to $147.7 billion while EBITDA stood at $60 million, a margin of 48.8%.
Going ahead, we are sure to see more deals of this nature as Airtel seeks to get a stronghold in Africa’s ever-growing fintech market.