Airtel delays Africa biz IPO
On a denial mode, telco says Africa lisitng preparations are proceeding according to plans
Bharti Airtel, the country's second-biggest wireless carrier, is delaying the planned initial public offering (IPO) of its Africa unit due to turmoil in the emerging market stocks, people with knowledge of the matter said.
The telco, which was originally aiming to list the unit in London by March, has pushed back the share sale by about six months, according to the people.
It plans to seek an enterprise value of about $8 billion for the business, the people said, asking not to be identified.
“Airtel Africa IPO preparations are proceeding as per plan and there is no change,” a representative for Bharti said in a statement on Monday. A “new board is in place, with new investor’s representatives, and we remain very confident about the IPO process.”
Shares of Airtel fell 1.56 per cent on Monday. Singapore Telecommunications, which owns a stake in Bharti’s parent company, had said in August the listing was slated for the first quarter of next year.
The equity rout has derailed IPOs around the world, with companies from Spanish oil refiner Cepsa to US filmmaker STX Entertainment scrapping or postponing their offerings.
Airtel, backed by Sunil Mittal, is seeking the listing after spending heavily to acquire spectrum in India, and defend its position in the country against Reliance Jio. It has operations in 14 African markets including Kenya, Tanzania, Nigeria and Ghana, according to its latest annual report.
“Sentimentally, it will be negative for Bharti as its investors are looking at the company’s steps to fight it out with rival Jio,” Sushant Kumar, equity fund manager, Raay Global Investments, Mumbai, said, “The IPO getting delayed is bad news as it would have helped in reducing the debt at a group level.”
Companies have completed $12 billion of IPOs in the UK this year, down from $15.8 billion year, data compiled by Bloomberg show.
Bharti hasn’t made any final decisions, and plans for the Africa unit’s offering could change, the people said.
Last week, Bharti had said its African unit raised $1.25 billion from investors including Warburg Pincus, Temasek Holdings and SoftBank.