Bharti Airtel plans to divest 25% in its Africa unit via an IPO on the London Stock Exchange
Bharti Airtel is also considering a plan to list the unit’s shares on the Nigerian Stock Exchange. “If the company decides to proceed with a listing on the Nigerian Stock Exchange, the earliest that will happen will be at the time of admission (to the London Stock Exchange),” it said.
The share sale plan follows Airtel Africa turning to profit for the first time more than a year ago. It posted a net profit of $83 million (Rs580 crore) for the March quarter, compared with a net loss of $49 million a year ago. Total revenue rose 6% to $781 million, though it fell from $783 million sequentially.
“Operating with an asset-light model, the company has improved financial performance, through sustainable revenue growth in voice, data and mobile money, significantly improved ebitda (earnings before interest, taxes, depreciation, and amortisation) margin with strong free cash flow generation,” said Raghunath Mandava, CEO of Airtel Africa. “Airtel Africa’s mobile payments business — Airtel Money — is the fastest growing business for the company.”
Bharti Airtel is facing pressure on revenue and profitability at home owing to intense competition triggered by the entry of Reliance Jio Infocomm. The company is trying to build a war chest to fund its 4G network expansion across the country. It has also been selling stakes in tower unit Bharti Infratel, and plans to sell another 32% in that company. It has also raised Rs 25,000 crore through a rights issue and Rs7,000 crore via a bond issue.
JPMorgan, Citigroup Inc, BofA Merrill Lynch Absa Group Ltd, Barclays Bank Plc, HSBC, BNP Paribas, Goldman Sachs International and Standard Bank Group Ltd have been appointed as advisers.
This helped cut net debt in the Africa business to $4 billion at the end of March from $7.8 billion a year back, analysts said.
The company had initially expected to raise $1.25 billion from the IPO, experts said. In January, Airtel’s Africa unit raised $200 million by selling a stake of about 4.37% to Qatar Investment Authority at a valuation of $4.58 billion. Before that, it sold about 25% to six investors including Warburg Pincus, Temasek, Singtel and Sof tBank Group International, raising $1.25 billion, valuing the company at $5 billion.