Six companies have pledged investment into Airtel Africa in a funding round which raised $1.25 billion for the operator.
This injection of funding will allow Airtel Africa to pay down its $5 billion debt pile, as well as boost its coverage and expand its mobile money offering. The operator further expects to see its debt reduced after its planned IPO, for which parent firm Bharti Airtel is currently finalising the details.
The six investors include operator groups Singtel and Softbank as well as investment funds Warburg Pincus and Singapore’s state-owned Temasek Holdings. Bharti Airtel stated that the show of confidence from investors was due to the “turnaround” that its African unit had undergone in the past few years, as well as the continent’s status as a high-growth market.
Airtel Africa CEO Raghunath Mandava said: “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.”
Prior to the announcement of its planned IPO, industry watchers had speculated that Bharti Airtel could divest some of its less profitable African units. The group’s chairman Sunil Mittal dismissed these rumours in December last year while acknowledging that the group’s “rushed” entry into the African market was the greatest regret of his career.