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Singapore Telecommunications (Singtel) has through its wholly-owned subsidiary Singapore Telecom International, subscribed a sum of 1.68 million new ordinary shares of Airtel Africa, at an aggregate consideration value of US$250 million (S$344 million).
The amount was paid in cash and was dealt on a willing-buyer and willing-seller condition, Singtel said. The investment is part of the US$1.25 billion of funding gathered together with five other investors including SoftBank Group, Temasek, and Warburg Pincus via a primary equity issuance.
The investment will serve to ease on Airtel Africa’s existing US$5 billion debt and be used to fuel the company’s growth in Africa.
Africa has been seeing a surge in growth for mobile wallets and payment systems. Projected as the world’s second fastest growing economic zone, Africa has a mobile market with unique mobile subscribers expected to rise to more than half a billion users by 2020, said Singtel.
Only 25% of the continent’s population have access to formal banking services, Singtel added.
Airtel Africa is the second largest telco in the continent with a customer base of 91 million, according to Singtel. The firm is ranked high up compared to its competitors in most of its 14 markets, Singtel added.
Singtel shares were little changed on Wednesday’s open, up 0.32% or 0.01 Singapore cents, at S$3.14.