NSSF to earn Shs8b from Airtel stake

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What you need to know:

  • Bharti Airtel, which is the parent company of Airtel Africa, under which Airtel Uganda falls, will get the largest share of the pay-out of Shs67b

National Social Security Fund (NSSF) will earn at least Shs7.9b from its 10.55 percent stake it holds in Airtel. 

The pay-out will be the first return on the Shs199b NSSF invested in the Airtel initial public offering that was closed on October 27. 

Airtel was listed on the Uganda Securities Exchange on November 6, becoming the second telecom to list on the exchange after MTN. 

Last week Airtel announced an interim dividend pay-out of Shs76b, which will be an early return for the more than 4,600 investors.

The pay-out comes two months after Airtel went public, promising shareholders a 95 percent dividend pay-out. 

NSSF is the second largest shareholder after Bharti Airtel and the only institutional investor that invested in the Airtel initial public offering.  

Bharti Airtel will get the largest share of the dividend pay-out of about Shs67b for its 88.11 percent stake. 

The Indian-based parent company, which owns Airtel Africa, under which Airtel Uganda falls, owns a stake of 40 billion shares, of which 4.36 billion were taken up by the public. “The board of directors of Airtel at the meeting held on November 24, 2023, resolved to declare and pay to the shareholders of the company an interim dividend for the year 2023 amounting to Shs76b … at a rate of Shs1.9 per share,” Airtel said in a notice last week.

Airtel also noted that the pay-out (net of withholding tax) is expected to be paid by December 21. 

NSSF bought 4.2 billion shares in Airtel for Shs199b on deadline day, a move which analysts said could have saved the Airtel initial public offering. 

The Fund became the biggest investor in Airtel and obtained 10.55 percent of the 40 billion shares and 93 percent of the floated stock.

Airtel will deduct the amount it will issue to its shareholders from its retained earnings as of September 30, whose results are yet to be announced. 

The money will be paid to shareholders who were on Airtel’s books by November 7, the day the IPO shares went public. 

Out of the planned Sh800b, Airtel raised Shs211.4b through the sale of shares between August 29 and October 27, which was just 54.45 percent of the eight billion shares offered. 

In its prospectus Airtel said it intended to issue a total of Shs500b in dividends for the year ending December 31. 

Thus, the Shs76b is an interim payment with the 2023 final dividend pay-out expected soon.