Airtel Africa, the African branch of the Indian mobile and payments giant, has announced that it has sold a 7.5% stake in its company to the sovereign wealth fund of Qatar for $200 million.
This comes close on the heels of the Rise Fund investing the same amount in March and Mastercard investing $100 million a few weeks later for a stake of 3.75%. This is a sure push from the company to sell its assets to reduce its debt and also to improve the network as well.
Airtel Africa has been one of the money-making arms of the overall company as it controls operations across 14 African countries which includes services like banking for the unbanked, deposit and withdrawal via mobile, payments processing, loans, cards, etc. This has seen some big growth over the last year which has helped it to double its profits year-on-year as per its announcement of results last week where it reported quarterly revenues of $124 million.
Mansoor bin Ebrahim Al-Mahmoud, CEO, QIA, said: “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.”
The company is looking to ultimately go public with its mobile money business in due course of time and before that, it wants to clear up as much of the debt as possible. As far as this arm of the company is concerned, it has been growing very strong and steady over the last few years as it was one of the first companies from outside Africa to massively invest into the mobile and mobile money business when other companies were hesitant to invest in the region. That strategy seems to have paid off well as it continues to enjoy good patronage across the entire region which has boosted its revenues.
The parent company , Airtel, also needs funds to continue its fight in India against its rival Reliance Jio and continue with its plan for expansion of not only its mobile network but also grow its mobile money business in various other regions where it continues to see some stunted growth.