Airtel Africa set to raise US$37.5m in Malawi as it plans an initial public offering

MALAWIAirtel Africa is set to raise US$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.

The reports state that Airtel Africa would embark on an IPO of 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.

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 US$37.5 million (MK27.92 billion), which implies a market capitalisation on admission of US$187.4 million (MK139.59 billion).

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.

Airtel Malawi’s Managing Director Charles Kamoto said the shares became available to the public following the decision of the company’s majority shareholders, Bharti Airtel, to let go of their equity.

“The offer will remain open until January 31, 2020 and will be followed by the announcement of the results of the offer to the public on February 14, 2020. Thereafter, an official listing on the local bourse will happen on February 24,” said Kamoto.

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.

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