London-listed telecom firm Airtel Africa announced today plans to sell $200 million or R2.9 billion stake in the mobile money business, the Airtel Mobile Commerce BV. Qatar Holding, an affiliate of the Qatar Investment Authority (QIA), will invest $200 million in Airtel Mobile Commerce BV.
AMC BV is the holding company for several of Airtel Africa’s mobile money operations, and ultimately is intended to own and operate the mobile money businesses across all of Airtel Africa’s fourteen operating countries.
Airtel Africa is exploring the listing of the mobile money business. For more read: Airtel Africa Mulls Floating The Mobile Money Business
“With today’s announcement we are pleased to welcome QIA as a prospective investor in our mobile money business, joining both Mastercard and TPG’s The Rise Fund as a further partner to help us realise the full potential from the substantial opportunity to bank the unbanked across Africa,” said Raghunath Mandava, CEO of Airtel Africa.
The QIA deal values Airtel Africa’s mobile money business at $2.65 billion or R38.7 billion on a cash and debt-free basis.
QIA will hold a minority stake in Airtel Mobile Commerce BV upon completion of the deal (alongside other minority investors), with Airtel Africa continuing to hold the majority stake.
This deal follows a $100m investment in Airtel Mobile Commerce BV by MasterCard and the sale of the group’s telecommunication towers companies in Madagascar and Malawi on 23 March 2021.
The proceeds from the transaction will be used to reduce group debt and invest in network and sales infrastructure in the respective operating countries.
“We are delighted to build on our support of Airtel Africa in promoting financial inclusion to the large and growing population of Sub-Saharan Africa,” Mansoor bin Ebrahim Al-Mahmoud, CEO of QIA, said.
“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.”
Mobile money services
Operating under the Airtel Money brand, Airtel Africa’s mobile money services is a leading digital mobile financial services platform catering to a large addressable market in Africa (characterised by limited access to formal financial institutions with limited banking infrastructure) and includes mobile wallet deposit and withdrawals, merchant and commercial payments, benefits transfers, loans and savings, virtual card and international money transfers.
Mobile money services are available across the Group’s 14 countries of operation, however, in Nigeria, Airtel Africa offers Airtel Money services through a partnership with a local bank and has applied for its own mobile banking licence.
It is the intention that all mobile money operations will be owned and operated by Airtel Mobile Commerce BV.
The Transaction first close is expected in August. From first close, QIA will be entitled to appoint a director to the board of Airtel Mobile Commerce BV and to certain customary information and minority protection rights.