In a press release today (24 October), Singtel Group – one of Asia’s largest telecoms operators – has announced it has entered into an agreement with its regional associate Bharti Airtel (Airtel) to invest USD250 million in Airtel Africa Ltd, a subsidiary of Airtel with operations in 14 African countries. The Singapore-based carrier, which holds a 39.5% effective stake in Airtel, says that its cash injection ‘forms part of USD1.25 billion that Airtel has secured from global investors, including Temasek, Warburg Pincus and SoftBank Group International [six investors in total], through a primary equity issuance in Airtel Africa, at a post money equity value of USD4.4 billion. The proceeds will be used to reduce Airtel Africa’s existing debt and grow its business ahead of an intended Initial Public Offering.’
Singtel’s press release goes on to point out that: Airtel Africa is the second largest telecom operator in the continent with a customer base of 91 million; it holds either the top or number two position in most of its 14 markets; and has been delivering healthy revenue growth in voice and data services. In addition, Airtel Africa ‘has also performed strongly in its mobile wallet service, Airtel Money, which has 11.8 million subscribers,’ it said.
Commenting on the investment, Mr Arthur Lang, CEO of Singtel’s International Group, said: ‘Our investment into Airtel Africa reflects our confidence in the long-term growth potential of Africa with its young and growing population. For many of Airtel Africa’s customers, the mobile phone is the key enabler for digital and financial inclusion. As Airtel continues to execute on its transformation strategy to become a leader in data and mobile money in Africa, we believe it is in a strong position to benefit from increasing smartphone penetration and mobile money adoption.’
‘This primary equity issuance clearly underlines the confidence of leading global investors in Airtel Africa’s successful business strategy and its potential to sustain growth and profitability,’ said Raghunath Mandava, MD and CEO, Africa, Bharti Airtel.