Airtel prices IPO of Africa unit at 80 pence per share


New Delhi: Bharti Airtel has priced the initial public offer of its subsidiary Airtel Africa at 80 pence per share, and based on this the market capitalisation of the subsidiary will be approximately £3.1 billion ($3.9 billion) upon completion of the offer, Bharti Airtel said in an exchange filing on Friday.

The offer was oversubscribed with strong interest from global investors across the United Kingdom, United States, Africa, Europe, West Asia and Asia, the company said, adding that dominant allocation was to global long only, strategic and pre-IPO investors.

Moreover, the IPO comes with a secondary listing on the Nigeria Stock Exchange.

“We are now the first telecom company to simultaneously list on the Premium segment of the London Stock Exchange and Nigerian Stock Exchange through an IPO. We welcome our new investors and look forward to continuing to execute our strategy and deliver the growth opportunities across our markets in voice, data and mobile money,” Raghunath Mandava, CEO of Airtel Africa said.

Bharti Airtel had announced plans to consider an IPO for Africa business in February 2018 and will use net proceeds from the issue of new shares to reduce $4 billion net debt.

Airtel Africa, the holding firm for Bharti Airtel’s operations in 14 countries in the continent, has 100 million customers across three regions—Nigeria; East Africa, comprising Kenya, Uganda, Rwanda, Tanzania, Malawi and Zambia; and the rest of Africa, which comprises Niger, Gabon, Chad, Congo Brazzaville, the Democratic Republic of the Congo, Madagascar and Seychelles.

Nigeria alone accounts for 36% of its total revenue.

Bharti established its presence in Africa in 2010 when it bought Kuwait-based Zain’s Africa operations for $10.7 billion. Over the past few years, it has been trying to expand in the continent through local acquisitions.

After the IPO announcement in February 2018, six investors, including Warburg Pincus, Temasek, Singtel and SoftBank Group International, in October invested $1.25 billion through a primary equity issuance in Airtel Africa. Sunil Kant Munjal of the Hero group was also part of this consortium. In January, Qatar Investment Authority, invested $200 million in the Africa arm.

As a result of these fund raises, the company’s net debt fell to $4 billion in the March quarter from $7.7 billion a year ago.

Africa has proved to be a beacon of hope for the company, which is at present faced with a struggling India business as it fights rival Reliance Jio at its home turf. In fact, the Africa operations posted a net profit of $83 million in the March quarter, compared to a loss of $49 million a year earlier.

Airtel Africa’s total revenue grew 6% year-on-year from $736 million to $781 million in the March quarter, while its earnings before interest, taxes, depreciation and amortisation improved 12% year-on-year from $307 million to $344 million in the March quarter.

The company offers pre-paid and postpaid wireless services in the continent, with an increasing focus on data and non-voice services through the expansion of its 3G and 4G networks, fixed-line telephone services, as well as mobile money services under its Airtel Money brand both nationally and internationally.

The mobile voice business segment is the largest component of the Airtel Africa’s revenue, representing 62.2% as of year ended 31 March 2019. The mobile data business segment accounted for 22.2% and Airtel Money accounted for 7.6% of the consolidated revenue.

Airtel Africa’s network includes 30,000 kilometres of fiber, over 16,400 3G sites and over 9,200 4G sites.

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