IPO report – Airtel Africa looking for $1.25bn in 2019

++ STORY UPDATED AFTER ARTICLE IN SUNDAY TELEGRAPH IN UK ON 3 FEB 2019 ++

Airtel Africa, a UK-based company, is on track for an initial public share offer (IPO) on an international stock exchange in 2019 expected to raise $1.25 billion. Last November 2018 the board announced it had appointed 8 global banks JP Morgan, Citigroup, BofA Merrill Lynch, Absa Group Limited, Barclays Bank PLC, BNP Paribas, Goldman Sachs International and Standard Bank Group for the IPO. It aims to value the African business at some $8bn.

The company has denied a report on Bloomberg that the IPO could be delayed from March 2019 for 6 months due to emerging markets turmoil.
By that date parent Bharti Airtel had raised $1.25 bn in pre-IPO placements to 6 global investors, according to a regulatory filing on the Bombay Stock Exchange (reported in Economic Times of India).

On 3 Feb, an article in the Sunday Telegraph newspaper suggested the IPO would come to the London Stock Exchange later in the year, after delaying the float because of volatility. At $8bn it would be the LSE’s biggest listing since 2017. It adds that Airtel Africa in January secured a further $200m investment from Qatar’s sovereign wealth fund to reduce cash borrowings ahead of the listing.

According to journalist Christopher Williams: “Airtel Africa has turned around in ¬recent years, after making heavy losses in competition with financially stronger players in Africa, including Vodafone-controlled Vodacom. In its most recent quarter profits doubled as mobile data consumption increased across its territories, building on its first full year of profit.”

For various reports, the IPO is expected to raise another $1.25bn. After the IPO Bharti Airtel will only hold some 65%, down from around 92%-93% at present. The pre-IPO investors include Warburg Pincus, Temasek, Singtel and Softbank Group International, according to the report. The money will be used to cut back debt and free up cash to combat rival Reliance Jio Infocomm in India.

Airtel Africa is the holding company for Bharti Airtel’s operations in 14 countries, including Kenya, Tanzania, Nigeria and Ghana. It is Africa’s second largest telco with over 94 million customers, and ranked in the top 2 carriers in most of the countries where it operates, offering 2G, 3G and 4G services, plus mobile commerce through Airtel Money.

In December, the tax authority in Niger had ordered the closure of Airtel Niger which has 4.4m customers, over a tax dispute. French-owned Orange said it had also been threatened with closure in Niger over a tax demand, according to this report.

Airtel also announced a new board from the parent company and the investors: Sunil Bharti Mittal, Raghunath Mandava, Akhil Gupta, Vishal Mahadevia, Alok Sama, Arthur Lang, Shravin Bharti Mittal and Richard Gubbins. In a press release it said the board: “brings extensive experience across industry verticals including – telecom & ICT, financial markets as well as in technology, software development and consultancy”.

African revenues rose nearly 13% for the quarter to September, and net income compared to a loss a year earlier.

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