Airtel Africa, a UK-incorporated subsidiary of Bharti Airtel, has got commitments from six global investors including Warburg Pincus and Temasek to invest $1.25 billion through a primary equity issuance. The investment is at postmoney value of $4.4 billion.
Singtel, SoftBank Group International are among others who have agreed to make the investments.
The proceeds will be used to reduce Airtel Africa’s existing debt of about $5 billion and for growth of its African operations, the company said in a statement. Subsequently, Airtel Africa intends an Initial Public Offering and use the proceeds primarily for further reduction of debt, it added.
Measure of confidence
“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,” Raghunath Mandava, MD and CEO, Africa at Bharti Airtel said.
Airtel Africa is experiencing a healthy revenue growth in its voice and data services and is also showing a strong performance in the Airtel Money business. The company’s financial performance continues to improve, having turned positive in terms of net profit and operating free cash flow. It is among the top two operators in most of the markets in which it operates.
With 4G services live in 9 countries and in process of rollouts in most others, Airtel Africa is well placed to capture a significant market share of the rapidly growing data demand across countries, it said. The present transaction will not involve any sale of shares by existing shareholders, it added.