Rise Fund invests US$200m in Airtel Mobile Commerce BV
Airtel Africa has announced an agreement according to which The Rise Fund, the global impact investment platform of leading alternative firm TPG, will invest US$200-million in Airtel Mobile Commerce BV (AMC BV), a wholly-owned subsidiary of Airtel Africa.
The transaction values Airtel Africa’s mobile money business at US$2.65-billion on a cash and debt basis.
According to a statement issued by the company, on completion of the transaction, The Rise Fund will hold a minority stake in AMC, with Airtel Africa continuing to hold the remaining majority stake.
The statement said the transaction is subject to customary closing conditions including the necessary regulatory filings and approvals, as necessary, and the inclusion of specific mobile money business assets and contracts into AMC BV.
Airtel said the proceeds from the transaction will be used to reduce the Group’s debt, and to invest in network and sales infrastructure.
It added that the transaction is the latest step in the Group’s pursuit of strategic assets mobilisation and investment opportunities, with the aim to explore the potential listing of mobile money business within four years.
It said it is in discussion 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.
Raghunath Mandava, CEO of Airtel Africa, said, “In line with our vision of enhancing financial inclusion, Airtel Africa offers a unique digital mobile financial services platform under the mobile 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-Sahara Africa. Our market therefore, affords substantial market potential of mobile money services to meet the demands of tens of millions of customers who have little or no access to banking and financial services.”
Yemi Lalude, Partner at TPG who leads Africa investing for The Rise Fund said, “Financial inclusion is a global problem that is most acute in Africa. We look forward to working with Airtel Africa to enhance mobile money services, broaden its use cases and grow into new markets. With this investment in Airtel Africa’s mobile money operations, we are excited to expand The Rise Fund’s global Fintech portfolio and continue to deepen our focus on improving financial inclusion in Africa and around the world.”