Airtel Nigeria’s IPO exclusively for high net worth investors

Shareholders urges transparency, task other multinationals

Bharti Airtel, the second largest telecommunications in Africa, is planning to sell its Nigerian unit’s shares exclusively to high net worth investors and qualified institutional investors, through book building.

The company, in its offer prospectus obtained by The Guardian at the weekend, 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.

Recall that the company had earlier announced plans to offer 501.125 million shares and 716.406 million shares to Nigerians, with a target of raising approximately $750 million from the global issue, including proceeds from the Nigerian offer.“Application has been made to the Nigerian Securities and Exchange Commission (SEC) for the registration of all of the ordinary shares to be issued in connection with the offer and to the council of the NSE, to be listed and admitted to the official trading list of the NSE,” the company said.

According to the company, the proceeds from the issue of the ordinary shares would be used to the deleveraging the company’s balance sheet, while the company is expected to be admitted on the premium-listing segment of the main board of the London Stock Exchange (LSE) at the end of the transaction.

“All ordinary shares subject to the offer will be issued or sold at the offer price, which will be determined by the company, following a book building process and in consultation with the Joint Global Co-ordinators. There are no restrictions on the free transferability of the Nigerian offer shares,” the company said.

In relation to the offer, Barclays Securities Nigeria Limited and Quantum Zenith Capital and Investments Limited have been appointed as Nigerian joint issuing houses, while Greenwich Securities Limited and Chapel Hill Denham Advisory Limited have been appointed as Nigerian receiving agents.

Meanwhile, Nigerian shareholders have applauded the proposed listing on the NSE, but however, urged parties to the offer and the regulators to ensure a transparent process.They urged other multinationals operating in Nigeria to list shares on the exchange to deepen the market and stimulate activities in the primary market segment of the NSE.

Specifically, the Publicity Secretary of Independence Shareholders Association, Moses Igbrude stressed the need for the regulators and other parties to the offer to ensure transparency in the exercise.“My advise to all parties- SEC, NSE, Airtel and other stakeholders, is to be transparent in their various roles so that what happened in the case of MTN would not repeat itself again. I sincerely welcome Airtel and congratulations all stakeholders that make it possible. I also advice the likes of Glo, 9mobile and others in the telecom sector to toll the same path.”

The President of New Dimension Shareholders Association, Patrick Ajudua said the listing would spur activities in the market, while urging the company to ensure due diligent in the exercise.“In view of unsavory development associated with the listing of MTN, we will expect due diligence on the part of the regulator and financial advisor to the offer.

The regulators must ensure that the firm comply with the listing rules and ensure verification of information provided by the company. It will bring more activities to the market. “The President of Ibadan zone Shareholders Association, Eric Akinduro said: “Airtel dual listing is a welcome development and we need such listing at time like this when the market is dwindling. It will bring more activities to the market.  It will give more room for competitiveness.

“Airtel as 2nd largest telecom in Nigeria that has presence in 14 countries including Nigeria. From the records, about 36 per cent of its total revenue is from Nigeria. My plea to the regulatory authority is to ensure that proper due diligence is conducted before final approval is given to the company.”