(Alliance News) - Airtel Africa PLC on Thursday announced it has signed an agreement with Rise Fund for a USD200 million investment in Airtel Africa's subsidiary Airtel Mobile Commerce BV.
The FTSE 250 Africa-focused telecommunications services provider said the transaction values Airtel Africa's mobile money business at USD2.65 billion on a cash and debt free basis. Rise Fund will hold a minority stake in Airtel Mobile Commerce upon completion, with Airtel Africa continuing to hold the remaining majority stake.
Airtel Africa said the transaction will close in two stages, with USD150 million invested at first close once the transfer of sufficient mobile money operations and contracts into AMC has been completed, and USD50 million invested at second close upon further transfers.
First close is expected over the next three to four months, at which point Rise Fund is entitled to appoint a director to AMC's board.
The company said it aims to the explore potential listing of AMC within four years, noting that if there is no initial public offering within that time, Rise Fund would have the option to sell its shares in AMC to Airtel Africa.
"In line with our vision of enhancing financial inclusion, Airtel Africa offers a unique digital mobile financial services platform under the Airtel Money brand. With today's announcement we are pleased to welcome The Rise Fund as an investor in our mobile money business and as a partner to help us realise the full potential from the substantial opportunity to bank the unbanked across Africa," said Airtel Africa Chief Executive Raghunath Mandava.
Shares in Airtel Africa were up 4.3% at 87.70 pence in London on Thursday.
By Zoe Wickens; zoewickens@alliancenews.com
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Airtel Africa (AAF)