QIA gives an extra $200M for its mobile money business
Mastercard invested $100 million in the mobile money business of telecom Airtel Africa three months ago. It received $200 million from the Rise Fund two weeks ago. The African telecoms operator said it had secured another investment for its mobile money arm.
What is the investor? The QIA has over $300 billion in assets and is an affiliate of the State of Qatar. The $200 million investment by the Middle Eastern corporation will be done through a secondary purchase of shares.
AMC is a holding company for several of the mobile money operations in 14 African countries, including Uganda and Nigeria. One of the largest financial services in Africa is provided by the mobile money arm. It gives users access to mobile wallet, support for international money transfers, loans and virtual credit cards.
The proceeds of the investment will be used to reduce debt and invest in network and sales infrastructure in operating countries, according to a statement released by the telecoms operator. $150 million of the deal will be invested at the first close, most likely in August. At the second close, $50 million will be invested. QIA will hold a minority stake while it continues to hold the majority stake, according to a claim by Airtel Africa.
On a cash and debt-free basis, the transaction still values the company at over $2 billion. This time, QIA is entitled to appoint a director to AMC's board and to certain customary information and minority protection rights. There are signs of growth in the most recent report.
The customer base of the telecoms operator grew by 24.6%. The transaction value went up 64.4% to $14.7 billion, and the earnings before interest, taxes, depreciation, and amortization went up to $60 million. The company made $124 million in revenue and had profits before tax of $185 million in the first quarter of the year.
The CEO of QIA said the investment by the sovereign wealth fund would help promote financial inclusion in Africa. For customers without access to traditional financial services, Airtel Money plays a critical role in facilitating economic activity. He said that they believe in the mission to expand it over the next few years.
In February, Airtel Africa made it known that it wanted to sell a minority stake in AMC to raise cash. It raised $500 million from outside investors and sold telecommunication towers in two countries for $119 million. The Rise Fund has a stake in the mobile money business."