TIDMAAF
RNS Number : 0499H
Airtel Africa PLC
30 July 2021
30 July 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Airtel Africa plc
("Airtel Africa", or the "Group")
QIA to invest $200 million in Airtel Africa's mobile money
business,
at $2.65 billion valuation.
London and Lagos: 30 July 2021: Airtel Africa, a leading
provider of telecommunications and mobile money services, with a
presence in 14 countries across Africa, today announces the signing
of an agreement under which Qatar Holding LLC, an affiliate of the
Qatar Investment Authority ("QIA"), will invest $200 million in
Airtel Mobile Commerce BV ("AMC BV"), a subsidiary of Airtel Africa
plc (the "Transaction") . 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.
The Transaction values Airtel Africa's mobile money business at
$2.65 billion on a cash and debt free basis. 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. The Transaction is subject to customary
closing conditions.
Following the announcement on 18 March 2021 of a $200m
investment in AMC BV by TPG's The Rise Fund, on 1 April 2021 of a
$100m investment in AMC BV by MasterCard and the sale of the
Group's telecommunication towers companies in Madagascar and Malawi
on 23 March 2021, the Transaction is a continuation of the Group's
pursuit of strategic asset monetization and investment
opportunities, and i t is the aim of Airtel Africa to explore the
potential listing of the mobile money business within four
years.
The proceeds from the Transaction will be used to reduce Group
debt and invest in network and sales infrastructure in the
respective operating countries.
Airtel Africa 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 the Group 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 AMC
BV.
In our most recent reported results for Q1'22, the mobile money
services (corresponding to all the businesses that are intended to
be transferred to AMC BV) delivered a strong operational
performance:
-- Generated revenue of $124m ($496m annualised), and underlying EBITDA of
$60m ($240m annualised) at a margin of 48.8%.
-- Year on year revenue growth for the quarter was 53.7% in
constant currency, largely driven by 24.6% growth in the customer
base to 23.1 million, and 25.4% ARPU growth.
-- Growth in transaction value was 64.4% (constant currency) to $14.7bn ($59bn annualised).
Our mobile money business benefits from strong network presence
with our core telecom business through the extensive distribution
platform of kiosks and mini shops as well as dedicated Airtel Money
branches supplementing our extensive agent network, to facilitate
customers' access to assured wallet and cash.
We have a clear strategy to continue to drive sustainable
long-term growth in Airtel Money with a focus on assured float
availability, distribution expansion and increased usage cases for
our customers.
Last year we added partnerships with Mastercard, Samsung,
Asante, Standard Chartered Bank, MoneyGram, Mukuru and WorldRemit
to expand both the range and depth of the Airtel Money offerings
and to further drive customer growth and penetration.
The profits before tax in the full year ending 31 March 2021 and
the value of gross assets as of that date, attributable to the
mobile money businesses were $185m and $668m, respectively.
Key elements of the Transaction
-- Agreement values Airtel Africa's mobile money business at
$2.65bn on a cash and debt free basis.
-- AMC BV, a subsidiary of Airtel Africa, is the holding company
for several of Airtel Africa's mobile money operations; and it is
intended that ultimately it shall own and operate the mobile money
businesses across all of Airtel Africa's fourteen operating
countries once the inclusion of the remaining mobile money
operations under AMC BV perimeter is completed.
-- QIA will invest $200m through a secondary purchase of shares
in AMC BV from Airtel Africa. The transaction will close in two
stages. $150m will be invested at first close, subject to customary
closing conditions including necessary regulatory filings, with
$50m to be invested at second close once further transfers of
certain mobile money operations and contracts into the AMC BV
perimeter have been completed.
The Transaction first close is expected in August. From first
close, QIA will be entitled to appoint a director to the board of
AMC BV and to certain customary information and minority protection
rights.
Raghunath Mandava, CEO of Airtel Africa, commented:
" 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 ."
Mansoor bin Ebrahim Al-Mahmoud, CEO of QIA, commented:
"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. 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."
-ENDS-
Enquiries
Airtel Africa - Investor Relations
Pier Falcione
Morten Singleton
Investor.relations@africa.airtel.com +44 207 493 9315
Hudson Sandler
Nick Lyon
Bertie Berger
airtelafrica@hudsonsandler.com +44 207 796 4133
The person responsible for making this announcement is Simon
O'Hara, Group Company Secretary.
About Airtel Africa
Airtel Africa is a leading provider of telecommunications and
mobile money services, with a presence in 14 countries in Africa,
primarily in East Africa and Central and West Africa.
Airtel Africa offers an integrated suite of telecommunications
solutions to its subscribers, including mobile voice and data
services as well as mobile money services, both nationally and
internationally.
The Group aims to continue providing a simple and intuitive
customer experience through streamlined customer journeys.
For more information visit https://www.airtel.africa/
About QIA
Qatar Investment Authority ("QIA") is the sovereign wealth fund
of the State of Qatar. QIA was founded in 2005 to invest and manage
the state reserve funds. QIA is among the largest and most active
sovereign wealth funds globally. QIA invests across a wide range of
asset classes and regions as well as in partnership with leading
institutions around the world to build a global and diversified
investment portfolio with a long-term perspective that can deliver
sustainable returns and contribute to the prosperity of the State
of Qatar.
For more information visit www.qia.qa
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END
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