Airtel Africa to raise $750 million via IPO to reduce debt

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New Delhi | Published: June 5, 2019 12:30:53 AM

Airtel Africa has a presence in 14 countries in Africa. As on December 31, 2018, Airtel Africa was the second largest mobile operator in Africa by number of active subscribers, according to Ovum.

Airtel Africa, Bharti Airtel, Initial Public Offering, Raghunath Mandava, ICICI Securities

Bharti Airtel’s African unit plans an initial public offer in London through which it targets to raise $750 million, that will be used to reduce the company’s net debt.

Bharti said the offer would comprise 25% new shares of Airtel Africa that will be listed on the London Stock Exchange and it expected pre-IPO investors to contribute.

“The company intends to have a free float of at least 25% of the company’s issued share capital and expects that it would be eligible for inclusion in the FTSE UK indices. Certain of the company’s pre-IPO, investors are expected to contribute towards the minimum 25% free float. In addition, it is expected that up to a further 15% of the offer will be made available pursuant to the over-allotment option,” the company said in a regulatory filing.

The company said it was also considering a listing of its shares on the Nigeria stock exchange. Airtel Africa had a net debt of around $4 billion at the end of March 2019.

Last year in October, a group of six global investors led by Warburg Pincus, Temasek, Singtel and SoftBank Group International announced investment of $1.25 billion through a primary equity issuance in Airtel Africa. The deal pegs its post-money equity value at $4.4 billion and enterprise value at $8.15 billion.

The company had also announced appointment of global banks, including JP Morgan, Citigroup, BofA Merrill Lynch, Barclays, BNP Paribas and Goldman Sachs for its intended IPO.

“We wish to inform that Airtel Africa, a subsidiary of the company has informed us its intention to proceed with an initial public offer for admission and listing of its shares on the main market of the London Stock Exchange. The offer is targeted to raise $750 million (plus a primary greenshoe option of up 15%) and will be used to reduce the net debt,” Bharti Airtel said in a BSE filing.

Airtel Africa has a presence in 14 countries in Africa. As on December 31, 2018, Airtel Africa was the second largest mobile operator in Africa by number of active subscribers, according to Ovum.

According to the company, it serves an aggregate of 98.9 million subscribers and 14.2 million mobile money customers across its footprint as on March 31, 2019. Nigeria represents the company’s largest single country subscriber base, comprising 37.6% of its total subscribers as at March 31, 2019, with 43.4% of subscribers in East Africa and the remaining 19.1% in rest of the Africa segment.

The company has recently reported its first full-year profit at $412 million for 2018-19, helped by higher data consumption and Airtel Money penetration. Its revenue increased 5.73% to $3,077 million in 2018-19 from $2,910 million a year ago.

Bharti Airtel established its presence in Africa in 2010 when it bought Kuwait-based Zain’s Africa operations for $10.7 billion.

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