Few weeks after the Nigerian telecommunications giant listed its Nigerian business unit on the local bourse, Airtel Africa, taking a bold step, has put forward registration documents to the United Kingdom Financial Conduct Authority (UKFCA) to list equity shares on the London Stock Exchange (LSE). The listing will aid Airtel to trim down its prevailing debts and also increase its services across Africa.
The telecoms firm has also signified its interest for a stock market floatation in Nigeria, on the Nigerian Stock Exchange (NSE), its largest market out of the 14 African countries where it currently operates; immediately it gets its admissions to trade on the London exchange.
Airtel Africa Plans To Offer 25% Of Its Shares To Raise $1 Billion.
Airtel Africa, a division of Indian telecoms group Bharti Airtel Ltd, may canvass $1 billion through the offering of 25% of its shares, in an initial public offering (IPO) on the London Stock Exchange.
It was reported in 2018, that the telecom operator raised $1.25 billion from 6 international investors, including SoftBank Group Corp, Warburg Pincus LLC and Temasek Holdings (Private) Ltd. In January 2019, it further raised $200 million from the Qatar Investment Authority, valuing the company under $5 billion.
The Chairman of Airtel Africa, Sunil Bharti Mittal, while revealing the proposed listing, said:
“Since first investing in Africa almost nine years ago, we have well leveraged our expertise in emerging markets to deliver on a clearly-defined strategy to build Airtel Africa into a market leading mobile service provider, increasingly expanding beyond voice into data services and Airtel Money. Today, Airtel Africa is the second largest mobile operator in Africa.”
“With the recent equity investments into the business by globally recognized long-term investors, we believe that Airtel Africa is in a strong position to build its own capital market profile, allowing others to join us in a real business success story. The new Board of Directors is committed to carry forward the strong legacy of corporate governance of the parent company,” he further added.
According to a report by Reuters, the additional cash from current investors has helped to reduce Airtel Africa’s net debt to $4 billion in March 2019, compared to the figure ($7.7 billion) in 2018. This brings its net income to $83 million in the year to March, compared to a net loss of $49 million a year earlier.
Experts React To The Overall Impact Of The TelCos’ Stock Market Floatation.
Meanwhile, Stockbrokers and analysts have termed Airtel Nigeria’s plan to float its shares on the Nigerian Stock Exchange as a positive development subsequent to the listing of MTN Nigeria on the local bourse. They said trend will inspire other firms to consider going public, and boost investor confidence while offering to them investment choices.
Speaking on the development, Ayodeji Ebo, who is the Managing Director of Afrinvest Securities Limited, declared that the scheduled listing would create more interest for prospective companies, however adding that the rate of listing on the nation’s bourse as well as the type of company would spur interest of companies in other sectors of the economy.
In the same vein, Adedeji Ajadi, the Chief Executive of the Chartered Institute of Stockbrokers (CIS), said the growing interest of telecom firms in the exchange would stimulate competition in the industry and in the stock market.
“I think it will be very positive for the market because Airtel is one of the companies that stakeholders in the market have been looking out for to be listed. These two coming at about the same time will be very good for the market,” Ajadi said.
“Generally, in terms of overall impact, that is what the market is looking out for – a variety of options for investors. Nigerian can also partake in the potential of these companies.”
Airtel Nigeria Limited.
Airtel Networks Limited, a subsidiary of Bharti Airtel, India, is one of Nigeria’s foremost telecommunications services provider headquartered in Lagos, the commercial nerve-centre of Nigeria. It has network presence in all states, Local Government Areas, major towns and villages in Nigeria.
The company’s mobile networks cover over 70% of Nigeria’s population with its 3G coverage ratio counting over 41%. The distribution network spreads across over 40,000 retail outlets with well over 332,042 retailers.