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Six leading global investors to pump US$1.25B into Airtel Africa

The transaction will not involve any sale of existing shares by Airtel and subsequently, Airtel Africa also intends an IPO on a recognized International Stock Exchange


Airtel Africa will use equity proceeds amounting to USD1.25 Billion from six leading global investors to reduce its existing debt and to grow the Africa business.

In the transaction that will not involve any sale of existing shares by Airtel, subsequently, Airtel Africa also intends an Initial Public Offering (IPO) on a recognized International Stock Exchange.

Airtel Africa Ltd is a UK incorporated subsidiary of Bharti Airtel Ltd.

The company announced on Wednesday announced that six leading global investors comprising Warburg Pincus, Temasek, Singtel, SoftBank Group International and others have agreed to invest USD1.25 billion through a primary equity issuance in the company at a post-money equity value of USD4.4 billion.

Airtel Africa has seen a turnaround of its business in recent years saying this investment demonstrates the confidence of leading global investors in the company’s ongoing robust growth and profitability.

The investment also reinforces the increased growth potential of the Africa telecommunications sector.

Proceeds will be used to reduce Airtel Africa’s existing debt of approximately USD 5 billion and for the growth of its African operations.

Proceeds from the IPO will be primarily used for a further reduction of debt.

Airtel Africa is experiencing a healthy revenue growth in voice and data services and also a strong performance in the Airtel Money business.

Its financial performance continues to improve, having turned positive in terms of net profit and operating free cash flow.

In most of the markets in which it operates, Airtel Africa ranks amongst the top two operators.

The telco has 4G services live in 9 countries and is in the process of rollouts in most others.

With its footprint across the continent, Airtel Africa is well placed to capture a significant market share of the rapidly growing data demand across countries.

The present transaction will not involve any sale of shares by existing shareholders.

Bharti Airtel Africa MD and CEO, Raghunath Mandava, said: “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. The transaction will help us further deleverage our balance sheet and boost our capacity to upgrade networks, expand coverage in different markets and achieve rapid growth of Airtel Money across our operations.”

In August this year, Mandava said that Airtel Africa’s Gross Revenue grew by 14% on a Y-o-Y basis saying that they will continue focusing on profitable growth and expanding Airtel Money base.

Source: The Exchange

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