Leading network operator Airtel Africa has revealed plans to list its local subsidiary in Malawi (Airtel Malawi Plc) on the country’s bourse. The planned initial public offering (IPO) follows the dual listing of the telecommunications group on the Nigerian and London stock exchanges earlier this year.
The telecoms company intends to apply for the admission of its ordinary shares on the main market of the Malawi Stock Exchange (MSE), it said in a corporate disclosure issued on the Nigerian Stock Exchange (NSE) on Wednesday.
Without stating the price range or the number shares to be sold in the offer, Airtel disclosed that its shares would be available for the public to purchase once necessary regulatory approvals had been received. The sale is also subject to market conditions.
“The indicative price range in respect of the Offer, as well as the exact number of shares to be sold in the Offer, will be determined in due course,” Airtel said in the statement, adding that the local unit will “offer its shares for sale subject to relevant regulatory approvals and market conditions.”
Airtel Malawi has contracted Standard Bank Plc in the country to act as bookrunner and as Lead Transaction Advisor to the company while it also did not provide a date for the listing.
The decision to list its shares in Malawi is in compliance with the laws of the southern African country. A section of the Communications Act of 2016 on licensing for the operation of a telecommunications and broadcasting subsidiary, requires that the company have at least 20 percent local Malawian shareholding.
Many countries across Africa have similar legislation that mandates local ownership in foreign companies, for the purpose of promoting local investment and ownership in key sectors such as telecoms. With Airtel’s IPO on the horizon, Malawians can buy and trade shares in the major company, making profits in the process.
Meanwhile, listing on the public market would contribute capital to the company’s shareholder equity as it opens up a huge opportunity for millions of investors to buy shares in Airtel Malawi.
The IPO would provide the telecoms firm access to raise a lot of money, giving it a greater ability to grow and expand. Also, the increased transparency and share listing credibility can be a factor in helping Airtel obtain better terms when seeking borrowed funds as well.
Airtel Africa (a subsidiary of India’s Bharti Airtel) is a leading provider of telecommunications and mobile money services. It is the second-largest mobile operator in Africa behind MTN by the number of active subscribers with subsidiaries in 14 nations across the continent.
The firm has a presence in Nigeria, Kenya, Uganda, Rwanda, Tanzania, Malawi Zambia, Niger, Gabon, Chad, Congo Brazzaville, the Democratic Republic of the Congo, Madagascar, and Seychelles.