Halotel seeks to float shares on Dar bourse

Monday February 5 2018

A trader at the Dar es Salaam Stock Exchange.

A trader at the Dar es Salaam Stock Exchange. PHOTO FILE | NMG 

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Telecommunications company Halotel has for the third time submitted its prospectus to Tanzania’s Capital Markets and Security Authority in preparation for an initial public offering at Dar es Salaam Stock Exchange.

Last year, Halotel and five other telcos — Tigo, Airtel, Maxcom Africa Ltd, TTCL and Smart — saw the applications rejected twice for failing to fulfil certain requirements for listing.

According to CMSA, the applications were rejected because of shareholding disputes, lack of transparency, failure to provide full information and regulatory technicalities.

“We returned the prospectus to Halotel because it lacked some regulatory requirements, after we finalise working on it, the company shares will be floated at the market,” said CSMA’s head of communication Charles Shirima.

The companies have a legal obligation to list on the DSE, following a directive to telcos and mining firms to list a part of their shares.

Tanzania requires telecom firms to have 25 per cent local ownership through a stockmarket listing. The government hopes the listings will bring more transparency and offer the public a share in the industry’s profits, which is one of the fastest-growing.

If their prospectus goes through, the telecommunication company will be the second after Vodacom, a subsidiary of South Africa’s Vodacom Group, which listed last year.

Legislation compelling all telcos to float shares on the Tanzanian bourse was introduced in 2010. It remained inactive until 2016 when President John Magufuli ordered its implementation.

Vodacom Tanzania’s IPO was fully subscribed after Tanzania’s stockmarket regulator extended the offer period twice and allowed foreign investors to participate in the IPO. The offer had initially been restricted to Tanzanians.

Vodacom’s latest financial results show its net profit plunged by almost half in the six months ending September 2017, due to charges paid to an underwriter during its initial public offering.

In their financial statement, the firm said the drop in profit was due to “greater regulatory uncertainty” and “macroeconomic pressures” that led to the drop in earnings in the second half of the year.

In April, the Tanzania Communications Regulatory Authority issued non-compliance orders to operators who failed to submit to a SIM card-registration audit conducted in December 2016.

Vodacom Tanzania was fined Tsh1.9 billion ($843,300) in July 2017 when the regulator issued the fines associated with these non-compliance orders.

The number of mobile phone subscribers in Tanzania rose 0.9 per cent last year to 40.17 million, driven by the launch of cheaper mobile phones in the country which has a population of around 50 million.