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Airtel Africa plans $1 billion IPO, London listing

Officially, the company did not divulge any numbers

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Sunil Bharti Mittal
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Airtel Africa, a unit of telecom player Bharti Airtel, plans to get listed on London Stock Exchange. It aims to raise $1 billion in the initial public offering (IPO), according to sources.

Officially, the company did not divulge any numbers.

Airtel Africa has sought approval from the UK Financial Conduct Authority for the offer. The IPO would comprise new shares and the sale would seek a free float of at least 25%, the company said on Tuesday in a filing. It is also considering a listing in Nigeria, it said.

The proceeds from the IPO will be used to pare debt, as Airtel is facing aggressive competition in the telecom sector in India.

Last year, Airtel Africa had raised $1.25 billion from six global investors including SoftBank Group Corp, Warburg Pincus LLC and Temasek Holdings (Private) Ltd, valuing the company at $4.4 billion.

Airtel operates in 14 African markets including the Democratic Republic of the Congo, Kenya, Nigeria, Rwanda, Seychelles, Uganda and Zambia. Airtel Africa has a debt of around $3.5 billion.

"Since first investing in Africa almost nine years ago, we have well leveraged our expertise in emerging markets to deliver on a clearly-defined strategy to build Airtel Africa into a market-leading mobile service provider, increasingly expanding beyond voice into data services and Airtel Money. Today, Airtel Africa is the second largest mobile operator in Africa," said Sunil Bharti Mittal, chairman of Airtel Africa.

"With the recent equity investments into the business by globally recognised long-term investors, Airtel Africa is in a strong position to build its own capital market profile, allowing others to join us in a real business success story," he said.

The new Board of Directors is committed to carry forward the strong legacy of corporate governance of the parent company, Mittal said.

For the quarter ended March this year, the Africa business has reported a net profit of $83 million owing to increased data consumption and rise in transaction volume on Airtel Money platform. It had posted a loss of $49 million in the same quarter previous year. Revenues grew 6% to $781 million during January-March this year from $736 million in the corresponding period last year.

Airtel Africa has about 99 million users. For the year ended March 2019, Airtel Africa posted a profit of $412 million against a loss of $138 million a year ago. Revenue grew 5.73% to $3,077 million in 2018-19 from $2,910 million in 2017-18, the company said.

Airtel Africa has appointed Global banks comprising J.P. Morgan, Citigroup, BofA Merrill Lynch, Absa Group Ltd, Barclays Bank PLC, BNP Paribas, Goldman Sachs International and Standard Bank Group for the intended IPO.

Airtel has been investing heavily in the Indian market to survive the cutthroat competition ushered in by new player Reliance Jio in the telecom sector.

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