Airtel plans London IPO, Lagos listing
… Nigerian operations made $1.1bn in revenues …applies for mobile banking license
Less than two weeks after Africa’s largest mobile operator, MTN, listed its Nigerian unit on the Nigerian Stock Exchange (NSE), Airtel Africa, the continent’s second-largest mobile operator, is planning an initial public offering (IPO) on the London Stock Exchange (LSE), a move expected to open
more investment opportunities in Nigeria.
These opportunities include a listing of its nigerian unit on the domestic bourse and acquisition of a mobile banking licence which would help to further increase financial inclusion rate in nigeria by extending financial services to the unbanked.
Air tel Africa on Tuesday announced plans to sell 25 percent of its shares through an IPO, while it looks forward to trading on the Main Market of the London Stock Exchange using its premium listing segment.
The success of these would lead to a listing on NSE, the company said in a document titled ‘Announcement of Intention to Publish a Registration Document and Potential Intention to Float on the London Stock Exchange’.
“The company is considering a listing of its shares on the Nigerian Stock Exchange. If the company decides to proceed with a listing on the Nigerian Stock Exchange the earliest that this will happen will be at the time of admission,” Airtel Africa said in the document released on Tuesday.
Although Airtel’s planned listing may have come shortly after MTN Nigeria listed on the NSE by way of introduction, Airtel has since 2016 indicated interest to trade its shares on Nigeria’s stock market.
Similarly, the telecommunication company, which operates three main business lines such as mobile voice, mobile data and Airtel Money, said it’s in partnership with a local bank in Nigeria and has applied for a mobile banking licence.
Nigeria represents the Group’s largest single country subscriber base, comprising 37.6 percent of the Group’s total subscribers as at March 31, 2019, with 43.4 percent of subscribers in East Africa and the remaining 19.1 percent in the Group’s Rest of Africa segment.
Airtel Africa had group revenues of $3.08 billion in the year ended March 31, 2019, and Nigerian operations alone accounted for 35.9 percent or $1.106 billion (N400 billion) compared to East Africa operations at 35.8 percent or $1.102 billion and rest of Africa’s revenue of $888 million representing 28.9 percent.
Air tel africa’ s earnings before interest, tax, depreciation and a mort is at ion( eb itda)whic his a measure of a company’s operating performance for Nigerian operations was $550 million for the period compared to East Africa’s $442 million and rest of Africa at $339 million.
Should it proceed with its intention to do an IPO, Airtel Africa intends to distribute to its shareholders a minimum of 80 percent of consolidated free cash flow.
“At the individual operating country level, the company will recommend to the local boards a dividend pay-out of a minimum of 80 percent of the free cash flow,” Airtel Africa said. This would be done “at the country level as long as a ratio of net debt to EBITDA between 2.5 to 3.5 times is maintained, subject to all regulatory, statutory and monetary restrictions”.
Immediately after the admission, Airtel Africa said it intends to have a free float of at least 25 percent of the company’s issued share capital and expects that it would be eligible for inclusion in the FTSE UK indices.
“In addition, it is expected that up to a further 15 percent of the offer will be made available pursuant to the OverAllotment Option,” it said.