Qatar sovereign wealth fund takes minority stake in Airtel Africa

Qatar's sovereign wealth fund will take a minority stake in Airtel Africa's mobile money unit.

The $200.0m investment by the Qatar Investment Authority values that unit AMC BV at $2.65bn on a cash and debt free basis.

Airtel Africa will continue to be the majority shareholder following the transaction.

Raghunath Mandava, Airtel's chief executive officer, welcomed the investment, telling investors that it would help realise the full potential of banking for the unbanked across the continent alongside its other partners, including Mastercard and TPG's The Rise Fund.

Other partners included Samsung, Standard Chartered Bank and Moneygram.

Proceeds from the sale would finance a reduction of Airtel's debt and investment in the necessary network and sales infrastructure in the various operating countries, the company added in a statement.

AMC BV was already the holding company for several of Airtel's mobile money operations in Africa and was intended to eventually operate that business in all 14 countries where the company was present.

In the first quarter of the 2022 financial year, Airtel Africa reported sales of $124m ($496m annualised) and underlying operating profits on an EBITDA basis of $60m ($240m annualised) with a margin of 48%.

Some economists expected Africa would be the world's fastest growing region out to the middle of the century.

In the years before the pandemic, average annual GDP growth in Africa had clocked in at 6%.

Six of the world's fastest growing economies before the Covid-19 pandemic were in Africa and over 2014-2050, PwC was projecting that Nigeria, South Africa, and Egypt would remain in the top ten.

As of 1608 BST, shares of Airtel Africa were trading up by 4.78% to 87.65p and pacing gains on the FTSE 250.