TPG fund puts $200m into Airtel Africa money business

Telecommunications company Airtel Africa announced an agreement with TPG investing platform the Rise Fund on Thursday, which would see the fund invest $200m (£143.27m) in its wholly-owned subsidiary Airtel Mobile Commerce.

The FTSE 250 company said Airtel Mobile Commerce is currently the holding company for several of its mobile money operations, and was now intended to own and operate the mobile money businesses across all of its 14 operating countries.

It said the transaction valued Airtel’s mobile money business at $2.65bn on a cash- and debt-free basis.

The Rise Fund would hold a minority stake in Airtel Mobile Commerce on completion, with Airtel Africa continuing to hold the remaining majority stake.

It said the transaction remained subject to customary closing conditions, including necessary regulatory filings and approvals, as well as the inclusion of specific mobile money business assets and contracts into Airtel Mobile Commerce.

The board said the transaction was the latest step in the firm’s pursuit of strategic asset monetisation and investment opportunities, with the company looking to explore the possible listing of the mobile money business within four years.

It said it was in discussions with other potential investors around possible further minority investments into Airtel Mobile Commerce, up to a total of 25% of its issued share capital.

The proceeds would be used to reduce group debt, Airtel said, and invest in network and sales infrastructure in its various 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,” said chief executive officer Raghunath Mandava.

“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.

“Our markets therefore afford 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.”

At 0840 GMT, shares in Airtel Africa were up 3.21% at 86.7p.