Big relief for Airtel Africa: 6 Global Investors including SoftBank and SingTel to invest $1.25B

African Wing of Bharti Airtel which was sailing through tough waters with a debt load of around $5 billion, will be receiving USD 1.25 billion. The company stated that this boost will happen with the help of six global investors, including Warburg Pincus, Temasek, Singtel and SoftBank Group International, who have agreed to invest $1.25 billion through a primary equity issuance.

According to the statement given by the company, this transaction will not involve any sale of shares by existing shareholders, according to a statement by the company. "...Six leading global investors comprising Warburg Pincus, Temasek, Singtel, SoftBank Group International and others have agreed to invest USD 1.25 billion through a primary equity issuance in the company at a post money equity value of approximately $4.4 billion," Airtel Africa said in a statement.

Singapore’s SingTel has invested $250 million in this round, has a 39.5% stake in Airtel. According to the report, this is the first investment which the company will use to cut its debt, improve coverage and grow its mobile money operation. The company is also in the process of finalizing the details of an Initial Public Offering of its African subsidiary.

“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.

Bharti Airtel in its statement also noted, that its African unit has seen a “turnaround” of its business in recent years, is experiencing a healthy revenue growth in voice and data services and also strong performance in the Airtel Money business. The financial performance continues to improve and has turned positive in terms of net profit and operating free cash flow, according to the company.