This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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.
.jpg)
