Airtel Africa to sell 7.5% stake in mobile money unit to QIA for $ 200 million

Airtel Africa has signed an agreement to sell around 7.5% stake in its mobile money unit to Qatar Holding LLC, a subsidiary of Qatar Investment Authority (QIA), for around $ 200 million.

This is the latest in a series of fundraising activities carried out by Sunil Mittal

reduce its debt and invest in the network. The injection by Qatar’s sovereign wealth fund will be through Airtel Mobile Commerce BV (AMC BV), the holding company of several Airtel Africa mobile money operations.

AMC BV, one of the 100% owned branches of Airtel Africa Plc, will eventually own and operate these mobile money businesses in Airtel Africa’s 14 operating countries once these businesses are included in AMC BV. concluded.

Airtel Africa’s latest deal with QIA comes months after signing a similar transaction to sell around 3.75% stake in its mobile money unit to global payment processor Mastercard Inc for $ 100 million. And before the Mastercard deal, it sold a 7.5% stake in its mobile money business to U.S. private equity firm TPG for $ 200 million.

“QIA will hold a minority stake in AMC BV upon completion of the transaction (alongside other minority investors), with Airtel Africa continuing to hold the majority stake,” Airtel Africa Plc said in an official statement on Friday evening.

The transaction is subject to customary closing conditions.

Airtel Africa said the proceeds of the transaction “will be used to reduce the group’s debt and invest in the network and sales infrastructure in the respective countries of operation.”

He said the deal is a continuation of the group’s pursuit of strategic asset monetization and investment opportunities, and Airtel Africa’s goal is to explore a potential list of l mobile money activity within four years.

“We are delighted to welcome QIA as a potential investor in our mobile money business, joining both Mastercard and TPG’s The Rise Fund as an additional partner to help us realize the full potential of the opportunity. substantial to bank the unbanked across Africa, ”Airtel Africa CEO Raghunath Mandava said in an official statement.

Airtel Africa’s deal with QIA will be completed in two stages: $ 150 million will be invested at first close once the transfer of a sufficient number of mobile money operations and contracts into AMC BV is completed , and $ 50 million will be invested at the second close in additional transfers.

The investment will be made through a secondary purchase of shares of AMC BV from Airtel Africa.

The first closing of the agreement is expected in August. “From the first close, QIA will have the right to appoint a director to the board of directors of AMC BV and certain customary rights to information and protect minorities,” said Airtel Africa.

Airtel needs funds not only to expand its 4G operations to fight rival Reliance Jio, but also to pay rupee 43,980 crore in Adjusted Gross Income (AGR) owed to the government and build a war chest to buy airwaves. in a potential 5G sale. The government has yet to schedule what will be India’s first 5G auction.

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