Two weeks ago, TPG’s Rise Fund invested US $ 200 million in Airtel Mobile Commerce BV (AMC BV) – the mobile money business of Airtel Africa’s telecommunications company. Upon completion of the transaction, Bharti Airtel’s subsidiary found that discussions were still ongoing to sell additional minority interests (25% of the issued share capital) to more potential investors.
Today the company announced a new investor – global payments provider Mastercard – with whom Airtel Africa will receive an additional $ 100 million for its mobile money business. AMC BV – which operates one of the continent’s largest financial services, providing users with access to mobile wallets, international money transfer support, loans and virtual credit cards – is valued at $ 2.65 billion.
The two companies are no strangers to each other. In 2019 they signed a contract that gave Airtel Africa’s 100 million subscribers in 14 countries access to Mastercard’s global network. (In this partnership there was no exchange between Mastercard and Airtel Africa.)
Airtel Africa and Mastercard announced today that they have “renewed trade agreements and signed a new trading framework that will deepen their partnerships in numerous regions and areas including card issuance, payment gateway, payment processing, merchant acceptance and remittance solutions.”
AMC BV’s cash and debt free valuation of $ 2.65 billion remains unchanged from last time. This means that the Rise Fund and the Mastercard from TPG will have a stake of 7.55% and 3.775% respectively after their transactions have been completed. For Mastercard, the deal will close in two tranches – $ 75 million to be invested on the first close (which will be completed over the next four months) and $ 50 million to be invested on the second close.
By selling a minority stake in the mobile money business to The Rise Fund, Mastercard and other potential investors, the telecom operator believes it can raise enough money to monetize its mobile money business and pursue a potential listing in four years.
The story goes on
Airtel Africa has not only received investments from the Rise Fund and Mastercard from TPG, but has also sold some assets. Last week, the company sold 1,424 telecommunications towers in Madagascar and Malawi to Helios Towers for $ 119 million. Both Helios and Airtel Africa have also agreed to trade tower goods in Chad and Gabon, although the details are not known.
These efforts are aimed at the company’s pursuit of strategic asset monetization, investment opportunities and, ultimately, debt reduction.
“With today’s announcement, we are pleased to welcome Mastercard as an investor in our mobile money business and to join The Rise Fund, which we announced two weeks ago,” said Raghunath Mandava, CEO of Airtel Africa, of the investment.
“This is a continuation of our strategy of increasing minority stake in our mobile money business with the further intention of listing this business within four years. We are significantly strengthening our existing strategic relationship with Mastercard to realize the full potential of what matters. ” Opportunity to improve financial inclusion in our countries of operations. “
