Leading telecoms operator Airtel Africa Limited is considering going public in a dual listing on stock exchanges in London and Nigeria. The stock market floatation is part of the company’s expansion plan for its data and mobile money services across the continent.
The company operates in 14 African markets, some of which are the Democratic Republic of Congo (DRC), Kenya, Nigeria, Rwanda, Seychelles, Uganda, and Zambia.
“These fast-growing markets provide us a great opportunity to grow both our telecom and payments businesses,” Chief Executive, Raghunath Mandava said. He added that the countries where Airtel Africa operates offer strong GDP growth potential and have young and fast-growing populations, low customer and data penetration and inadequate banking infrastructure.
The listing on the London Stock Exchange (LSE) will see Airtel trade 25 percent of new shares on the main market under the premium listing segment. The premium board has more stringent rules than the minimum requirements of the European Union (EU).
Another crucial objective of Airtel Africa’s planned listing is the reduction of existing debt. As at March 2018, Airtel Africa’s net debt stood at $7.7 billion but was reduced to $4 billion same periods this year with the aid of the cash injection from existing investors, including SoftBank Group Corp, Warburg Pincus LLC, and Temasek Holdings (Private) Ltd.
According to a source close to the deal, the company is looking to raise around $1 billion from the equity offering in June. This follows the $200 million the telecom operator raised in January from the Qatar Investment Authority (QIA), on the back of $1.25 billion funding from its global investors last year.
Airtel Africa Ltd is a subsidiary of Indian telecoms group Bharti Airtel Ltd with a valuation of just under $5 billion. The company recorded a net income of $83 million in the year to March, compared to a net loss of $49 million a year earlier.
If the planned listing on the Nigerian Stock Exchange (NSE) goes through, Airtel would become the second telecoms company to list its shares on the Nigerian bourse after MTN Nigeria’s listing earlier this month. While its debut on the London market would come a few months after Middle Eastern payments companies Finablr and Network International started trading on the exchange.
Advisers for the firm on the stock market entry include JP Morgan, Citigroup Inc, BofA Merrill Lynch, Absa Group Limited, Barclays Bank PLC, HSBC, BNP Paribas, Goldman Sachs International, and Standard Bank Group Ltd.