Bharti Airtel gains after Mastercard invests in Airtel Africa's mobile money biz

Bharti Airtel added 1.08% to Rs 522.90 after Airtel Africa's mobile money business received $100 million investment from Mastercard.

In a regulatory filing made during market hours today, the company said that its subsidiary, Airtel Africa, signed an agreement under which Mastercard, a leading innovator and global technology company in the payments industry, will invest $100 million in Airtel Mobile Commerce BV (AMC BV), a wholly owned subsidiary of Airtel Africa.

AMC BV is currently the holding company for several of Airtel Africa's mobile money operations and is intended to own and operate the mobile money businesses across all of Airtel Africa's fourteen operating countries.

The transaction values Airtel Africa's mobile money business at $2.65 billion on a cash and debt free basis.

Mastercard will hold a minority stake in AMC BV upon completion of the transaction, with Airtel Africa continuing to hold the majority stake. The transaction is subject to customary closing conditions including necessary regulatory filings and approvals, and the transfer of specified mobile money business assets and contracts into AMC BV.

Alongside the investment, the Group and Mastercard have extended commercial agreements and signed a new commercial framework which will deepen their partnerships across numerous geographies and areas including card issuance, payment gateway, payment processing, merchant acceptance and remittance solutions, amongst others.

The investment by Mastercard follows $200 million investment in AMC BV by TPG's The Rise Fund. The said transaction along with the sale of the Group's telecommunication towers companies in Madagascar and Malawi are a continuation of the Group's pursuit of strategic asset monetisation and investment opportunities.

Airtel Africa aims to continue to monetise its mobile money business with minority investments up to a total of 25% of the issued share capital of AMC BV, and to explore the potential listing of the mobile money business within four years.

The proceeds from the transaction will be used to reduce Group debt and invest in network and sales infrastructure in the respective operating countries.

Airtel Africa is a provider of telecommunications and mobile money services, with a presence in 14 countries across Africa.

Bharti Airtel is a global telecommunications company with operations in 18 countries across South Asia and Africa

On a consolidated basis, Bharti Airtel reported a net profit of Rs 853.60 crore in Q3 FY21 as against net loss of Rs 1,035.30 crore in Q3 FY20. Net sales during the quarter jumped 24.2% year-on-year (Y-o-Y) to Rs 26,517.80 crore.

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