The company plans to offer new shares, including the greenshoe option, that will be equivalent to about 15% of the company’s issued capital, a person with knowledge of the matter told ET.
The company expects to raise about $750 million from the offer, excluding the 15% greenshoe option, Airtel Africa said in a filing with the LSE on Tuesday. The net proceeds from the issue will be used to reduce net debt, it said.
Airtel Africa intends to have a free float of at least 25% of the company’s issued share capital and some pre-IPO investors are expected to contribute towards achieving this level, it said in the filing.
The company has already raised $1.45 billion via pre-IPO placements to seven global investors, including Qatar Investment Authority, Warburg Pincus, Temasek, Singtel and SoftBank Group International.
Bharti Airtel currently owns 68.3% in its Africa unit, while the seven global investors collectively own the remainder 31.7%. After the IPO, the public holding in Airtel Africa will be 25% and the stakes of Airtel and the global investors will stand diluted to 75%.
Airtel Africa is expected to raise funds at a valuation of about $5.8 billion, people familiar with the matter said.
In response to ET’s queries, Airtel declined to comment.
A greenshoe option allows underwriters to offer additional shares at the offer price to investors if public demand exceeds expectations.
Before the shares are admitted for trading on the LSE, the company will be re-registered as a public company limited by shares and renamed Airtel Africa Plc.
Airtel Africa said in the filing that the indicative price range of its upcoming IPO, as well as the number of shares to be sold, will be determined in due course and contained in the prospectus expected to be published in the coming weeks.
“The final offer price will be determined following publication of the prospectus and a book-building process, with admission expected to occur in July 2019,” Airtel Africa said.
The Africa unit is also “considering a listing of its shares on the Nigerian Stock Exchange.”
Bharti Airtel managed to cut the net debt of its Africa business to $4 billion at the end of March from $7.8 billion a year ago by virtue of the $1.45 billion raised via the pre-IPO placements.
Consolidated net debt rose to Rs 1.08 lakh crore in the March quarter from Rs 1.06 lakh crore in the previous one, increasing its net finance cost by 38% to Rs 2,532 crore during the January-March period.
Bharti Airtel has been facing pressure on revenue and profitability in India amid competition triggered by the entry of Reliance Jio Infocomm in September 2016. The company is trying to build a war chest to fund its countrywide 4G network expansion and participate in the upcoming 5G spectrum sale.
The telco has been selling stakes in tower unit Bharti Infratel and plans to sell another 32% in that company. It raised Rs 25,000 crore through a rights issue in May and Rs 7,000 crore via bond sales.
