Airtel Africa is set to raise $37.5 million in Malawi Stock Exchange as the telecommunication company plans an initial public offering (IPO). The IPO would aid the Malawian investing public own 20% shares of the network provider.
Nairametrics had reported that Airtel Africa would embark on an IPO of its Malawian subsidiary on the main market of the Malawi Stock Exchange. The network provider, which has subsidiaries in 14 African countries, disclosed that its shares would be available for the public to purchase once necessary regulatory approvals had been received.
What you need to know about Airtel’s IPO: In a statement on the Nigerian Stock Exchange (NSE), Airtel Africa reported that the set price for the IPO was $0.02 (MK12.69) per ordinary share. According to the telecoms firm, the offer will compromise 1.65 billion shares, representing 15% of the issued share capital.
The company said the additional 550 million shares, which represents 5% of the issued share capital, would be made available, subject to the exercise of the over-allotment option. Airtel Malawi hopes to raise gross proceeds of approximately up to $37.5 million (MK27.92 billion), which implies a market capitalisation on admission of $187.4 million (MK139.59 billion).
Why is Airtel Africa listing in Malawi? It is listing its shares in Malawi in order to comply with the laws of the country. Section 35 of the Communications Act of 2016, regulation 26 (2) of the communication (Telecommunications and Broadcasting Licensing), Regulations of 2016 and Clause 42.2 of the Subsidiary’s operating license requires the company to have at least 20% local Malawian shareholding.
Though the date for its listing wasn’t disclosed, the company disclosed that its subsidiary had employed the services of Standard Bank Plc in Malawi to act as book runner and as Lead Transaction Advisor to the company.
The listing plan for the Malawian Stock Exchange market comes six months after Airtel Africa listed its shares in Nigeria’s stock market. While Airtel Malawi is one of Airtel’s smaller markets, Airtel Nigeria is its key revenue driver in Africa. The company accounts for 33 million subscribers in Nigeria, making it the second-largest network provider in the country behind MTN Nigeria. It listed in Nigeria in July 2019.