Airtel’s operations in Africa have faced tough times but recently, there has been light at the end of the tunnel after the company reported increased revenues in certain African markets. Today, Airtel Africa Limited, that is ironically incorporated in London, announced that it had received an investment of $1.25 million from a total of six investors.
The investors, comprising of Warburg Pincus, Temasek, Singtel and SoftBank Group International, have invested undisclosed amounts each through a primary equity issuance in the company at a post-money equity value of approximately USD 4.4 billion.
Airtel says that the investment will be used to offset the company’s debt of about $5 billion while also being used to grow its operations in the country. In addition to this, Airtel Africa is planning an IPO on a “recognized international stock exchange”, whose proceeds will primarily be used to offset said debt. The company also clarified that these transactions will not involve any sale of shares held by current shareholders.
“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,” said Raghunath Mandava, MD and CEO, Africa, Bharti Airtel.
This move is a turn of events from rumours earlier this year that Airtel was planning to close shop on a number of its African operations due to non-performance.