Airtel Uganda will list 8 billion or 20 per cent ordinary shares on Uganda Security Exchange (USE) secondary market through a public offer before the regulatory deadline of December 16.
The telco, through its parent company Airtel Africa, announced on August 9 the appointment of Absa Bank Uganda Ltd as a Lead Transaction Advisor, Crested Capital as a Lead Sponsoring Broker, Katende Ssempebwa and Company Advocates appointed Legal Advisor while consultancy firm Ernst & Young (EY) will play the role of the Reporting Accountant.
“The offer is expected to result in a meaningful local ownership of Airtel Uganda Ltd with preference to be given to Ugandan investors and to contribute to the development of the capital markets in Uganda,” Airtel Africa said in a statement.
“Following approval of the Prospectus by the Capital Markets Authority (CMA), the shares will be offered to retail investors via Airtel Money’s platform, in addition to traditional channels, in an effort to increase retail participation.”
Airtel Uganda is seeking to float 20 percent (8 billion shares) of its shareholding to the public as part of a regulatory requirement to allow locals have a share of the pie.
Subject to the approval of the Prospectus by the CMA , the offer will be effected by way of an offer for the sale of ordinary shares by Bharti Airtel Uganda Holdings B.V. ultimately, a wholly-owned subsidiary of Airtel Africa, who will receive all the proceeds of the offering , net of related expenses.
In 2019 the Uganda government directed telecom operators in the country to list at least 20 percent of their shares on the local bourse within two years in a move designed to encourage local ownership.
The policy shift put pressure on multinationals operating in Uganda such as MTN, Airtel and Lycamobile to sell shares to the public.
MTN Uganda was the first to go public in 2021 through an initial public offering (IPO) that attracted local and regional investors including Kenyan institutions.
Last year, Airtel Africa applied to the Uganda Communications Commission seeking an extension by one year to comply with the local ownership requirements of its Ugandan subsidiary.
The listing of Airtel shares on the USE offers East Africans opportunity to have a piece of Uganda’s second biggest telco by market share and subscriber numbers.
“We are now on the road to our IPO and look forward to the publication of the prospectus which will convey greater detail on both the company and the IPO,” said Manoj Murali, Airtel managing director at a media briefing in Kampala last week.
The company generates 49 per cent of the industrial revenue, and boast 47.3 per cent subscriber market share after MTN Uganda.
Highlights released by the telco indicate that during the year ended December 1, 2022, Airtel Uganda reported $410.1 million in revenues generated, EBITDA $242.8 million, and a net income of $89.1 million.
According to Uganda Communications Commissions, the requirement for listing must be within two years from the date of issuance of the license undertaken in accordance with the existing listing rules as prescribed by the Uganda Capital Markets Authority.