London-listed telecom firm Airtel Africa today announced that it is exploring the listing of the mobile money business, the Airtel Mobile Commerce BV.
The company, which has a presence in 14 countries across Africa, said on Thursday in a statement that The Rise Fund will invest $200 million in Airtel Mobile Commerce BV.
The Rise Fund is a global impact investing platform of leading alternative investment firm TPG.
AMC BV is currently the holding company for several of Airtel Africa’s mobile money operations and is now intended to own and operate the mobile money businesses across all of Airtel Africa’s fourteen operating countries.
The Rise Fund deal values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt-free basis.
The Rise Fund will hold a minority stake in AMC BV upon completion of the deal, with Airtel Africa continuing to hold the remaining majority stake.
“The transaction is the latest step in the Group’s pursuit of strategic asset monetization and investment opportunities, and it is the aim of Airtel Africa to explore the potential listing of the mobile money business within four years.,” the company said.
“The group is in discussions with other potential investors in relation to possible further minority investments into Airtel Money, up to a total of 25% of the issued share capital of AMC BV. There can be no certainty that a transaction will be concluded or as to the final terms of any transactions.”
The telco said the proceeds from the deal will be used to reduce debt and invest in network and sales infrastructure in the respective operating countries.
“In line with our vision of enhancing financial inclusion, Airtel Africa offers a unique digital mobile financial services platform under the Airtel Money brand. 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,” Raghunath Mandava, CEO of Airtel Africa, said.
“Our markets, therefore, afford the 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.
“With today’s announcement, we are pleased to welcome The Rise Fund as an investor in our mobile money business and as a partner to help us realise the full potential from the substantial opportunity to bank the unbanked across Africa.”
MTN is planning to demerge its Fibre and FinTech business and to bring third party investors to unlock value trapped in the company.
Ralph Mupita, MTN CEO, said Wednesday MTN plans to separate the two businesses are already underway structurally.
“Importantly, under the revised strategy we will look to structurally separate some of our businesses such as Fintech and Fibre over the medium-term, as part of revealing and crystallizing value,” said Mupita.
“MTN is open to third-party capital and partnerships in those fintech and fibre businesses over the medium-term, with the potential of either, in due course, that some of these assets could be listed or remain unlisted,” Mupita explained.
MTN’s latest data released today shows that the value of MTN Mobile Money (MoMo) transactions were at $152 billion (R2.3 trillion) as of December 2020.
The mobile phone operator added that it processed 12 400 MoMo transactions per minute (up 35% from 9 200 in 2019).
Furthermore, the group disclosed that the number of active MTN Mobile Money users increased by 11,7 million to 46,4 million, generating a monthly ARPU of $1,2.
“If we were a bank, we would be a very bank. We see a separation and carve out of our fintech business as something that we have to do,” he told 702’s The Money Show on Wednesday evening.
Mupita said he was aiming to double MoMo users to 100 million by 2025 from the current 46 million.