By Uzoma Akobundu
Airtel, one of Nigeria’s leading GSM providers will have its day at the Nigerian Stock Exchange when the management formally goes public on Friday, July 5 to be part of the market.
Unlike MTN that went to the market and the cost of its shares became issues of controversy, Airtel has already made public how much the share goes for- N363 per share.
Segun Ogunsanya, Airtel Managing Director.
About a fortnight ago, Airtel indicated that it was ready to list on the huge Nigerian stock market as a way of remaining a major player in the telecommunications sector in Nigeria.
In May, Punch reported that Bharti Airtel Limited, India’s second-biggest wireless carrier, was preparing to kick off the initial public offering of its Africa unit in a deal that could raise about $1bn, people familiar with the matter said.
Airtel Africa is planning to make a formal announcement about the London listing this month and aims to start trading in June, the people told Bloomberg, asking not to be identified because the matter is private. The telecom company is considering seeking an equity valuation of about $5bn, they said.
The IPO could be one of the biggest in London this year. The exchange’s lackluster domestic volumes are being boosted by emerging-market companies seeking a wider investor pool. Finablr, the currency-exchange firm controlled by an Abu Dhabi-based billionaire, starting taking orders this week for a share sale that could raise as much as $677m. Middle Eastern payments processor Network International Holdings Plc raised 1.1 billion pounds ($1.4bn) last month in the largest London IPO this year.
Valuation and the listing date are still under discussion, and final details could change depending on investor demand and market sentiment, the people said. A representative for Bharti Airtel declined to comment.
Bharti Airtel, backed by billionaire Sunil Mittal, has spent heavily to defend its position in India against disruptive upstart Reliance Jio Infocomm Limited, which stormed the Indian market by slashing prices and prompting consolidation in the industry. The firm’s Africa unit raised $1.25bn last year from investors including Temasek Holdings Pte and SoftBank Group Corp., giving it an equity value of about $4.4bn.
The investment, through a fresh share issue, will result in the African company having an equity value of about $4.4bn, Airtel said in a statement Wednesday. The company surged 10.5 percent, the most since May 18, 2009, at the close in Mumbai on Wednesday.
For Airtel, the fund injection will help reduce the Africa unit’s debt of about $5bn and expand operations before a planned initial public offering.
The infusion values the Africa unit at “a premium to global telcos but below earlier expectations,” Jefferies analyst Piyush Nahar and Pratik Chaudhuri wrote in a report, adding that a public listing for the unit which has seen a sharp turnaround in the past 12 months, was “still on the cards”.
Singapore Telecommunications Limited., which holds an effective stake of 39.5 per cent in Airtel, had said it was also part of the investor group and that its share of the total investment is $250m.
The business has operations in 14 African markets including Kenya, Tanzania, Nigeria and Ghana, according to Bharti Airtel’s latest annual report.