Airtel Africa has just received a $100 million investment from Mastercard, a global technology leader in the payments industry. Mastercard will get a minority stake in the company against this investment.
But Mastercard will get a minority stake in the Airtel Mobile Commerce BV (AMC BV), a wholly-owned subsidiary of Airtel Africa, and not the Airtel Africa group itself.
For the unaware, AMC BV operates most of the mobile money operations of Airtel Africa in the 14 countries it is present in. AMC BV is currently a holding company for Airtel Africa.
The investments made by Mastercard directly go into AMC BV, which will help the company in expanding its network and pay off debt from its books.
After the transaction, the business valuation of Airtel Africa has jumped to $2.65 billion on a cash and debt-free basis.
Apart from the investment, Airtel Africa and Mastercard have also joined hands to form more commercial partnerships. The new partnership will help Airtel Africa leverage the technology of Mastercard in areas such as payment gateway, payment processing, card issuance, remittance solutions, merchant acceptance, and more.
Airtel Africa Aiming for Potential Listing of AMC BV as a Public Company
As mentioned above, AMC BV is currently owned and operated by Airtel Africa. With the current investments, the company is looking to expand its sales and network infrastructure in the respective countries it is operating in.
Further, Airtel Africa aims to list AMC BV as a public company in the next four years. The group is currently accepting investments from other institutions and companies against a minority stake of 25% in AMC BV.
Before Mastercard, TPG’s Rise Fund invested $200 million into AMC BV on March 18, 2021. In addition to this, the group sold off its telecom towers in Malawi and Madagascar on March 23, 2021.
With the proceeds from the transactions, the group will be able to reduce its debt and expand its network infrastructure in the 14 countries it is providing services in.