IPO In Mind, Airtel Africa Raises $1.25 Bn From 6 Global Investors

Bharti Airtel’s Africa business or Airtel Africa is planning to raise $1.25 billion from six global investors including SoftBank, Singtel, Temasek and Warburg Pincus to reduce debt and prepare the company for its planned IPO.

“The proceeds will be used to reduce Airtel Africa’s existing debt of approx. USD 5 billion and for growth of its African operations,” the Group company said in a statement. It also added that “Airtel Africa subsequently intends an Initial Public Offering and use the proceeds primarily for further reduction of debt.”

Airtel said the funds will be raised through a primary equity issuance in the company at a post money equity value of ~ USD 4.4 billion. Airtel Africa has seen a turnaround of its business in recent years. This investment demonstrates the confidence of leading global investors in the company’s ongoing robust growth and profitability. The investment also reinforces the increased growth potential of the Africa telecommunications sector.

The company clarified that the present transaction will not involve any sale of shares by existing 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.

Airtel Africa is experiencing a healthy revenue growth in voice and data services and also strong performance in the Airtel Money business. Its financial performance continues to improve, having turned positive in terms of net profit and operating free cash flow. In most of the markets in which it operates, Airtel Africa ranks amongst the top two operators. 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.

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