Airtel to list eight billion shares after a year of delay
Airtel had been expected to float a 20 percent stake on the Uganda Securities Exchange by December 2022. Photo / File
What you need to know:
- This is part of a requirement under the National Broadband Policy, which demands that telecoms must sell a part of their stake to Ugandans
Airtel will before the end of this year float 20 percent or eight billion of its shares through an Initial Public Offer (IPO) on the Uganda Securities Exchange.
This is part of a requirement under the National Broadband Policy, which demands that telecoms must sell a part of their share to Ugandans.
Speaking in Kampala yesterday, Mr Nishant Mohan, the Airtel chief financial officer, said the IPO will see up to eight billion existing ordinary shares made available with preference given to Ugandans.
“We [shall … soon be in a position to share ownership of our business with Ugandans,” he said, therefore, ending months of speculation about Airtel’s listing plan which had delayed for about a year.
Uganda Communications Commission (UCC) had imposed a listing deadline of December 15, 2022, but in April 2022, Airtel, however, applied for an extension, which was granted before it was extended to December 16, 2023.
In a separate interview, UCC had indicated that Airtel had reasoned that lack of market readiness as a result of Covid-19 and a dampened economic environment would impact the IPO, which could result into a possible undersubscription.
Airtel joins MTN, which was the first telecom to list under the National Broadband Policy in 2021.
Mr Manoj Murali, the Airtel managing director, yesterday said the telecom was “now on the road to our IPO and look forward to the publication of the prospectus, which will convey greater detail on both the company and the IPO”.
UCC requires that listing for telecoms is done within two years from the date of issuance of the license undertaken in accordance with existing listing rules as prescribed by Uganda Capital Markets Authority.
In 2020, Airtel indicated that it had paid $78m (Shs291b) to UCC for the renewal of its public service provider license.
Airtel, previously Celtel, launched the country’s first mobile cellular network in 1995 and was later in 2010 acquired by Bharti Airtel, which operates Airtel Africa, which also includes the Uganda subsidiary.
Mr Murali said Aritel currently has 14.3 million active subscribers, generating 49 percent of total market revenue and a 47.3 percent subscriber market share, respectively.
During the period ended December 2022, Airtel noted it had registered Shs1.5 trillion in revenues, returning a profit of 326b.
The law
The National Broadband Policy notes that making local listing a licencing requirement for all telecom
operators will help on mitigation of capital flight among other benefits of local content opportunities.
