In less than two weeks from today, it is expected that the Nigerian subsidiary of Airtel Africa, Airtel Nigeria, will list its shares through a book building process on the Nigerian Stock Exchange (NSE), paving the way for interested and qualified investors to buy into the company.
Book building is a process of price and demand discovery by which an issuing house/book runner attempts to determine at what price a public offer should be made, based on demand from qualified institutional and high net worth investors.
The listing of Airtel shares is coming at a time the performance of stocks in the market remains unimpressive in spite of the remarkable profits posted by some listed firms in the first three months of the year.
After Skyway Aviation Handling Company (SAHCO) listed by initial public offering (IPO), the Lagos bourse is set for Airtel IPO, a move that could attract more foreign and domestic investors to the market that has lost as much as 5 percent of its value since the beginning of this year.
It is noteworthy that representation and an agreement to be a ‘‘High Net Worth Investor (HNWI)’’ or a ‘‘Qualified Institutional Investor (QII)’’ are the conditions to qualify for the Nigerian offer of Airtel shares by any prospective investor, according to the telecommunication firm.
Under Rule 321 of the Securities and Exchange Commission (SEC) rules and regulation 2013 (as amended), HNWI is defined as an individual with a net worth of at least N300 million, excluding automobiles, homes, and furniture.
Similarly, QIIs include banks, fund managers, pension fund administrators, insurance companies, investment/unit trusts, multilateral and bilateral institutions, registered and/or verifiable private equity funds, registered and/or verifiable hedge funds, market makers, staff schemes, trustees/custodians, stock broking firms, and other categories that may be determined by the Nigerian capital market regulator.
Airtel seeks to raise approximately $750 million in its global offering, including any proceeds from the Nigerian offer, even as it plans to use the net proceeds from the offer principally on the reduction of debt, in particular, to achieve a targeted leverage ratio of 2.5x.
On Friday, June 28, 2019, details of the offer price, offer size publication of the pricing statement and allocation of ordinary shares would be unveiled, while allotment of new ordinary share to the shareholders would take place on June 29.
Crediting of ordinary shares to accounts would be done on July 3, 2019, while admission of shares through an initial public offering and the commencement of unconditional dealings on the NSE are slated to hold on July 4.
The company has already filed an application for the admission to the Nigerian SEC, while “an application for the ordinary shares of the company to be listed on the official list will be done pursuant to the cross-border listing requirements of The NSE,” the telco stated in its prospectus.
In relation to the planned offering and listing on the NSE, Barclays Securities Nigeria Limited and Quantum Zenith Capital & Investments Limited were appointed as Nigerian joint issuing houses, while Greenwich Securities Limited and Chapel Hill Denham Advisory Limited were appointed as Nigerian receiving agents.
The offer price for Airtel Nigeria ranges from 80 pence to 100 pence; this is equivalent from N363 to N454 per ordinary share. The price range is indicative only and may change during the course of the offer, and the offer price may be set within, above or below the price range.
The company stated that the offer price will be denominated in pounds sterling and naira, while it will specifically be stated in Nigerian Naira for the purpose of the Nigerian admission.
The offer price and basis of allocation would be determined by a number of factors, including the level and nature of the demand for the offer shares during the book-building process and prevailing market conditions.
Furthermore, Airtel noted that the Nigerian offer will not be underwritten and there are no restrictions on the free transferability of the Nigerian offer shares.
