TPG platform invests $200m in Airtel's mobile money
TPG's global impact investing platform The Rise Fund is to invest US$200 million in Airtel Mobile Commerce (AMC), with potential for an IPO within four years.
A wholly owned subsidiary of Airtel Africa, AMC is the holding company for several of Airtel Africa’s mobile money operations, which in Q3 last year generated revenue of $110 million ($440 million annualised), and underlying EBITDA of $54 million ($216 million annualised) at a margin of 48.7%.
Under the terms of the deal, AMC would own and operate Airtel's mobile money businesses across all of Airtel's 14 national markets once the inclusion of the remaining mobile money operations under AMC is completed. This would include Nigeria, where Airtel offers mobile money services through a partnership with a local bank and has applied for its own mobile banking licence.
The group said it is in discussions with other potential investors in relation to possible further minority investments in Airtel Money, up to a total of 25% of the issued share capital of AMC. However, the group said, "there can be no certainty that a transaction will be concluded or as to the final terms of any transactions".
If it does go ahead, proceeds will be used to reduce group debt and invest in network and sales infrastructure in the respective operating countries. The timeline for the ownership change is currently estimated to be three to four months, with an IPO "within four years".
As a condition of the investment, Airtel Africa said that if the IPO does not go ahead, TPG would be able to sell it stake "to Airtel Africa or its affiliates at fair market value" that does not exceed $400 million.