CHUKWUMAH KELECHUKWU
Airtel Africa Plc says it is going to leverage data, voice and mobile money penetration to grow its earnings and deliver improved returns to prospective shareholders beginning end of 2019 and going forward.
Chief Executive Officer of the mobile telecommunications company, Mr. Segun Ogunsanya, disclosed this to capital market community at a presentation of the company’s facts before listing in Lagos on Friday.
The company’s earnings outlook is dim with a huge $4 billion debt which management said will offset with the proceeds from the IPO.
Ogunsanya said the company posted a 12 percent growth to $3 billion last year, up from five percent to $2.7 billion in 2017, and attributed the growth to what he described as key pillars of the business- voice, data, and mobile money business.
He said that although in Africa, the voice aspect of their business had been growing, yet there is huge potential in data and mobile money stressing they have the highest potential for driving revenue.
For this reason, he said, the company has been increasing investment in 4G network in every country where it is operating so as to maximize the potential.
The planned shares listing on the Nigerian Stock Exchange (NSE) on Friday was put on hold after management failed to get the required number of subscribers to its just concluded Initial Public Offering (IPO) which was said to be heavily undersubscribed.
The NSE said in a statement that the postponement was necessitated by the need to ensure that the company meets all the post approval pre-requisites for listing.
Fielding questions from stockbrokers and financial journalists, Ogunsanya said the company would pay out 80 percent of its profit by year end beginning from 2019 despite the debt overhang.
Clarifying the make up of the $4billion debt, the Airtel boss stated that $2.6billion represent bonds, $260million is bank overdraft, $1.2million is lease obligations, and more.
He noted that the very reason for the IPO was to pay down the debts and deleverage the company. Adding that the company’s regular cash flow is sufficient to support its operations as a going concern without further pressure.
The postponement of secondary listing of Airtel on the NSE is coming after its London Stock Exchange (LSE) primary listing, which followed a book building process that saw investors purchase 637,178,979 ordinary shares of 50 Cents at 80 Pence per share.
According to Ogunsanya the listing will take place on an undisclosed date after fulfilling regulatory requirements. Expected to be listed in the dual/cross-border listing on the NSE main board is the entire issued 3,758,151,504 ordinary shares of Airtel Africa Plc.
By this arrangement, shares of Airtel Africa with operations in 14 African countries is expected to be listed at N363 per share, potentially adding N1.364trillion to the market capitalisation.
Airtel Africa Plc (Airtel Africa) is the holding company of Airtel Networks Limited (Airtel Nigeria) and thirteen (13) other subsidiaries in Africa – Airtel Congo S.A., Airtel Gabon S.A., Celtel Niger S.A., Airtel Congo RDC S.A. (DRC).
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