Hard on the heels of yesterday’s announcement of its latest results, in which the company's mobile money business enjoyed a strong performance, pan-African operator Airtel Africa has announced another major investment in its mobile money operations.
Qatar Holding LLC, an affiliate of the Qatar Investment Authority (QIA), will invest $200 million in Airtel Mobile Commerce BV (AMC BV), the holding company for several of Airtel Africa's mobile money operations. AMC BV is ultimately intended to own and operate the mobile money businesses across all of Airtel Africa's 14 operating countries.
The transaction values Airtel Africa's mobile money business at $2.65 billion on a cash-and-debt-free basis. QIA will hold a minority stake in AMC BV (alongside other minority investors) upon completion of the transaction, with Airtel Africa continuing to hold the majority stake.
There has already been a $200 million investment in AMC BV by TPG's The Rise Fund, and a $100 million investment in AMC BV by MasterCard. The Group's telecommunication towers companies in Madagascar and Malawi have also been sold. Airtel Africa describes the latest agreement as "a continuation of the group's pursuit of strategic asset monetization and investment opportunities".
As before, the proceeds from the transaction will be used to reduce group debt and invest in network and sales infrastructure in its operating countries. Airtel Africa aims to explore the potential listing of the mobile money business within four years.
It’s reasonable to assume that Airtel Africa's mobile money services, which cater to a large addressable market of unbanked and underbanked end users in Africa, have good growth prospects. In the quarterly results reported yesterday the mobile money services delivered a strong operational performance.
In addition, Airtel Africa's extensive distribution platform, as well as partnerships with companies like Mastercard, Samsung, MoneyGram, Mukuru and WorldRemit, to name only a few, will, it is hoped, help the company to drive sustainable long-term growth for its mobile money operations.