Telecoms service provider, Bharti Airtel, has announced the appointment of eight international banks to coordinate the London initial public offering for its Africa business.
The International banks includes J.P Morgan, Citi Group, BofA Merill Lynch, ABSA Group Limited, Barclays Bank Plc, BNP Paribas, Goldman Sachs International, Standard Bank Group.
What is an IPO?
IPO refers to Initial Public Offerings where company’s newly listed on the stock exchange raise money to finance working capital or investment.
The teleco-giant recently has named an eight-member board ahead of its planned Listing in London next year June. The member includes Sunil Bharti Mittal, Raghunath Mandava, Akhil Gupta, Vishal Mahadevia, Alok Sama, Arthur Lang, Shravin Bharti Mittal, and Richard Gubbins all representatives from parent and global investors.
Airtel Africa is a subsidiary of India’s Bharti Airtel Limited, also announced that it had raised $1.25 billion from six global investors. Among the new investors are SoftBank Group Corp, Warburg Pincus LLC and Temasek Holdings (Private) Limited. The $1.25 billion fund, which was sourced through a primary equity issuance, now values the telco at $4.4 billion and will be used to reduce existing debt of about $5 billion and grow its Nigeria and other Africa operations.
Why this is important for Airtel Nigeria operations
There has been a significant turnaround in the fortunes Airtel Africa operations, In its second quarter reports for the period ended 30 September revenue grew by 10.8 percent year-on-year which was led by a significant growth in data and Airtel Money transactions.
The planned listing will make it easier for Airtel to raise capital for expansion and better position it to better compete with major players in other operating markets such as Nigeria where MTN is the market leader owing close to 40% of the market share. The teleco-giant, this year started the upgrade on its network to 4G and it is currently in 60 major cities and towns in Nigeria across different states.
Airtel Nigeria is the second largest telco with a market share of 26 percent, according to the September monthly subscribers report by the Nigerian Communication Commission (NCC).