Shareholders want firm to explain methodology of proposed listing
Finally, the Nigerian Stock Exchange (NSE) has announced plans by Airtel Africa to list its 3,758,151,504 ordinary shares on the nation’s bourse Tuesday, July 9, 2019.
The cross border secondary listing, which was earlier slated for Friday, July 5, 2019 was postponed to ensure that the company meets all the post NSE approval pre-requisites for listing on the exchange.
Airtel Africa plans to sell its Nigerian unit’s shares to high net worth investors and qualified institutional investors, through book building.
The company, in its offer prospectus said the offer price for Nigerian issuance would be pegged between N363 and N454 per share. Book building is a price discovery mechanism that is used in the stock markets, while pricing securities for the first time, by providing the investors with a price range and then asking them to bid.
A high net worth investor is defined as someone with $3 million or more in investable assets, not including the value of their primary residence, although the most commonly quoted figure for membership in the high-net-worth club is around $1 million in liquid financial assets.
At the company’s facts before listing held in Lagos at the weekend, the Managing Director, Segun Ogunsanya said the listing would be done after fulfilling regulatory requirements.
Subsequently, shares of Airtel Africa with operations in 14 African countries would be listed at N363 per share, adding a total of N1.364 trillion to the market capitalisation of the NSE.
Meanwhile, shareholders have stressed the need for Airtel Africa to educate retail investors on methodology of its proposed listing on the Nigerian Stock Exchange (NSE) to boost patronage of the stock post listing.
Already, the NSE had granted waiver to the telecommunications company to list its shares on the exchange without meeting the minimum requirement of 300 shareholders as of the day the listing was approved by the national council of the NSE.
Besides, they applauded the exchange on the postponement, noting that the decision would increase investors’ confidence on the market.
According to the exchange, its cross-boarder listing requirements rule grants the exchange the powers to give exemption or waivers, even as the rule was developed to attract such listing to the exchange.
However, NSE noted that the security of Airtel would be marked as Below Listing Standard (BLS) because they could not meet the requirement presently, adding that by the time the retail investors increase patronage on the shares, they would eventually meet the requirement and the BLS mark would be removed from the stock.
But the shareholders at the weekend, argued that retail investors’ shallow knowledge of Airtel’s methodology on proposed lNSE may affect the needed increased participation expected from retail investors for the exercise.
They suggested that Airtel Africa must organise a forum where the process followed for the exercise would be explained to shareholders, if it must attract the needed participation.
Specifically, the Publicity Secretary of the Independent Shareholders Association, Moses Igbrude, said: “Many investors do not understand the method Airtel used in selling it’s shares and that I think it affected the rate of subscriptions.
“The current state of the economy also affects some investors. It is good that the NSE suspended the listing of Airtel shares. That is a sign of improvement and will make investors to have more confident on the market.”
The President of New Dimension Shareholders Association, Patrick Ajudua, said postponement would enable the firm to meet NSE’s post-listing requirements as a pre-requisite to listing it’s shares.
“This showed that the regulator is alive to its responsibility of ensuring strict adherence to exchange rules, corporate governance and rule of law. It is also aimed at ensuring that due diligence is carried out to avoid unresolved issues surrounding d listing of MTN,” he said.
The President of Ibadanzone Shareholders Association, Eric Akinduro, said: “Any regulatory issue can always be flagged to protect the image of our market. We should allow the regulators to certify the listing, particularly for a company of this nature.”