Airtel Airtel’s subsidiary secures $100m investment from Mastercard

Airtel Africa Plc, a provider of telecommunications and mobile money services, has announced the signing of an agreement under which Mastercard, a global technology company in the payments industry, will invest $100m in Airtel Mobile Commerce BV.

AMC BC, a wholly owned subsidiary of Airtel Africa, is currently the holding company for several of the telecommunication company’s mobile money operations and is intended to own and operate the mobile money businesses across all of Airtel Africa’s 14 operating countries.

The transaction values Airtel Africa’s mobile money business at $2.65bn on a cash and debt free basis, according to a statement on Thursday.

The telco said Mastercard would hold a minority stake in AMC BV upon completion of the transaction, with Airtel Africa continuing to hold the majority stake.

The transaction, according to the statement, is subject to customary closing conditions including necessary regulatory filings and approvals, and the transfer of specified mobile money business assets and contracts into AMC BV.

It said alongside the investment, Airtel Africa and Mastercard had extended commercial agreements and signed a new commercial framework, which would deepen their partnerships across numerous geographies and areas including card issuance, payment gateway, and payment processing.

The telco described the transaction as a continuation of its pursuit of strategic asset monetisation and investment opportunities.

It recently announced $200m investment in AMC BV by TPG’s The Rise Fund, and the sale of its telecommunication towers companies in Madagascar and Malawi.

According to the statement, Airtel Africa aims to continue to monetise its mobile money business with minority investments up to a total of 25 percent of the issued share capital of AMC BV, and to explore the potential listing of the mobile money business within four years.

It said the proceeds from the transaction would be used to reduce group debt and invest in network and sales infrastructure in the respective operating countries.

The Chief Executive Officer of Airtel Africa, Raghunath Mandava, said, “With today’s announcement we are pleased to welcome Mastercard as an investor in our mobile money business, joining The Rise Fund which we announced two weeks ago.

“This is a continuation of our strategy to increase the minority shareholding in our mobile money business with the further intention to list this business within four years.

“We are significantly strengthening our existing strategic relationship with Mastercard to help us both realise the full potential from the substantial opportunity to improve financial inclusion across our countries of operation.”