Airtel Africa Ltd, a subsidiary of India’s Bharti Airtel Ltd, has raised $1.25 billion from six global investors, including SoftBank Group Corp, Warburg Pincus LLC and Temasek Holdings (Private) Ltd.
Raised through a primary equity issuance, the fund now raises the telecommunications company’s value to $4.4 billion and will be used to reduce existing debt of about $5 billion and grow its Africa operations.
The Chief Executive, Bharti Airtel’s Africa unit, Raghunath Mandava, stated that “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.”
Following a price war in India since the market entry of Reliance Jio in 2016, Airtel, like its peers, has been trying to shed debt and aggressively win customers.
As a strategic step towards improving its operations, Reuters reported last month that telco appointed UBS Group AG, JPMorgan Chase & Co and Citigroup Inc to coordinate the London initial public offering of its Africa business.
On Wednesday, Airtel Africa said it aimed to go public on an international stock exchange in a deal whose proceeds would also be used to reduce debt.
Currently, Airtel is operating in 14 African markets, including Democratic Republic of the Congo, Kenya, Nigeria, Rwanda, Seychelles, Uganda and Zambia.
Africa accounted for over a quarter of the company’s June-quarter revenue of about 201 billion rupees (about $2.74 billion) and is set to report earnings for its quarter ended September on Thursday.
The company stated: “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.”