FinTech: Airtel Africa Sells Another Chunk Of Its Mobile Money Biz – This Time To Mastercard For $100M

April 1, 2021 | FinTech, News
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Mastercard will get a 3.75% stake.

A wholly-owned unit of MasterCard (NYSE: MA) has agreed to pay $100 million for a 3.75% stake in Airtel Africa’s mobile money operations that span 14 countries in that continent. The mobile money business is organized under Airtel Mobile Commerce BV, a subsidiary of Airtel Africa plc (LON: AAF). The deal follows after a previous transaction earlier this month in which Airtel Africa sold 7.5% of its mobile money business to The Rise Fund, an arm of US private equity giant TPG, for $200 million. (Economic Times)

Airtel Africa: Debt reduction

According to Reuters, Airtel Africa plans to partly monetize the African mobile money business by selling up to 25% of the unit. In November last year, Bloomberg reported that the company planned to sell about 4,500 telecommunication towers across five African countries to help reduce $3.5 billion of debt.

The company concluded a deal to sell its telecommunication towers in Madagascar and Malawi on 23 March 2021 for $108 million.

MasterCard: Minority holding only

The transaction with MasterCard values Airtel Africa’s mobile money business at $ 2.65 billion on a cash and debt-free basis. MasterCard will only hold a minority stake in Airtel Mobile Commerce BV, while Airtel Africa will continue to hold a majority stake.

Raghunath Mandava, CEO of Airtel Africa, commented: “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.”

Related Story:  TPG’s Impact Investing Arm Pays $200M For Stake In Airtel Africa’s Mobile Money Biz                                                  

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