Airtel Africa Plans To List On LSE, May Use Proceeds To Cut $ 2-Billion Debt

Bharti Airtel on Tuesday said its Africa unit (Airtel Africa) planned an initial public offering (IPO) and list on the London Stock Exchange, and that might fetch the company close to $1 billion.

The company announced its plans for an IPO of its Africa unit last year. It is learnt that the company plans to sell 25 percent of the new shares of Airtel Africa in the proposed IPO and is looking to trade on the main market of the London Stock Exchange, using its premium listing segment.

The telecom operator last year raised $1.25 billion from six global investors including SoftBank Group Corp, Warburg Pincus LLC and

Temasek Holdings (Private), valuing the company at $4.4 billion or 75 percent.

“In furtherance to our previous intimations in this regard, we wish to inform you that Airtel Africa, a subsidiary of the company, has announced its potential intention to undertake an initial public offering for listing its equity shares on London Stock Exchange…,” Bharti Airtel said in a filing to the BSE.

The company also said related documents had been submitted for approval to the UK Financial Conduct Authority.

The exercise is being undertaken mainly to reduce the company’s debt, which is hovering around Rs 2 trillion, analysts said.

Airtel, which has a customer base of about 94 million in 14 countries of Africa, operates in Nigeria, Chad, Gabon, Madagascar, Kenya, Tanzania, Uganda, Zambia, Rwanda, among others.

“Today, Airtel Africa is the second-largest mobile operator in Africa. With the recent equity investments in the business by globally recognised long-term investors, we believe 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,” Sunil Bharti Mittal, chairman of Airtel Africa, said.

Airtel’s Africa focus can be gauged from the announcement it made in December 2017, when the company said its subsidiary Airtel Rwanda would acquire a 100 percent stake in Tigo Rwanda Ltd under a definitive agreement with Millicom International Cellular.
The company has said it will consolidate its position as the market leader or emerge as the second player in 14 African nations, where the company has a presence through inorganic growth.

Airtel’s Africa operations reported a net profit at $83 million for the quarter ended March 31, mainly on account of increased users of its Airtel Money platform and increased data consumption. It had posted a net loss of $49 million in the corresponding period, last year.

It reported a nearly 16 percent year-on-year increase in Ebitda (earnings before interest, tax, depreciation and amortization) at $354 million.―Business Standard