The IPO will see 25% of the company’s shares up for sale for retail as well as pre-IPO investors following which the company will be eligible for inclusion in the FTSE UK indices, the company said in a filing to London Stock Exchanges Monday.
The company is expected to raise 595 million pounds ($749.05 million) by issuing about 595.2 million to 744 million new shares. The given price range implies a market capitalisation between 3.01 billion pounds and 3.62 billion pounds ($3,788 million – $4,565 million).
“Ten per cent of the offer is expected to be made available pursuant to the over-allotment option…Excluding the overallotment option, the offer is expected to comprise approximately 541.1 million – 676.4 million new shares to be issued by the company to raise gross proceeds of approximately £541 million ($682 million).”
A greenshoe, or overallotment, option allows underwriters to offer additional shares at the offer price to investors if public demand exceeds expectations.
While the final pricing is expected to be announced around June 28, the company said that conditional dealings will begin the same day, while unconditional dealings are likely to begin around July 3.
“We are excited to be able to give an opportunity to a broader audience of institutional investors to participate in some of the fastest growing telecom and payment markets in the world through the IPO of Airtel Africa shares on the London Stock Exchange,” said Raghunath Mandava, CEO of Airtel Africa.
“We have built Airtel Africa into the second largest mobile operator in Africa and our clear strategy and efficient business model make us well positioned to capture growth opportunities across our markets, in voice, data and mobile money,” he added.
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. The Africa unit also “intends to undertake a listing of its shares on the Nigerian Stock Exchange concurrently with the IPO,” subject to all relevant approvals, the company said.
After the IPO, the stakes of Airtel and the global investors will stand diluted to 75%. Bharti Airtel currently owns 68.3% in its Africa unit, while the seven global investors collectively own the remainder 31.7%.
Bharti Airtel has already 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 pre-IPO placements to seven global investors, including Qatar Investment Authority, Warburg Pincus, Temasek, Singtel and SoftBank Group International.
Proceeds from the IPO will go towards reducing debt of the company at a time when competition with Reliance Jio continues to escalate. The company’s 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 in the January-March period.
Facing revenue and profitability pressure in India, 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.
