Markets

Airtel Africa completes pre-IPO placement to 6 investors, rakes in $1.25 billion

Bharti Airtels Africa unit has concluded the pre-IPO placement of shares to six global investors, including Warburg Pincus, Temasek, Singtel and SoftBank Group International, and in turn, raised the $1.25 billion (Rs 9,200 crore), which will be used to pare debt.

“We hereby inform that upon receipt of full issue proceeds, the said primary equity issuance to the leading global investors by Airtel Africa, UK has been completed,” Bharti Airtel said in regulatory filing on BSE Friday.

After the pre-IPO primary share issue, Bharti Airtels stake in its Africa unit will dip to around 65%. ICICI Securities said Airtel earlier held 92-93% in Airtel Africa.

Airtel Africa, which is the UK-based holding company of Bharti Airtels operations in 14 countries in the continent, also announced the appointment of its board of directors.

“Constitution of the company board follows recent successful primary equity issuance of $1.25 billion to six leading global investors, ahead of an intended IPO on an international stock exchange,” Airtel Africa said in a media statement Friday.

The Airtel Africa board includes representatives from Airtel and the global investors. It includes “Sunil Bharti Mittal, Raghunath Mandava, Akhil Gupta, Vishal Mahadevia, Alok Sama, Arthur Lang, Shravin Bharti Mittal and Richard Gubbins.

The company said the newly constituted board “brings extensive experience across industry verticals including – telecom & ICT, financial markets as well as in technology, software development and consultancy”. Additionally, the combined strength of the board would also bring a wealth of industry and governance experience to further drive Airtels Africa business.

Airtel shares were up 3.42% in afternoon trade to nearly Rs 303.

The $1.25 billion placement is part of a two-stage fund raising exercise. The second stage will be an initial public offer of UK-based Airtel Africa through which the company is likely to raise a similar sum, which analysts say will further help the Sunil Mittal-led telco to bring down its over $15 billion consolidated debt and free up
cash to fight rival Reliance Jio effectively in its main market, India.

The latest developments come at a time when the companys Africa operations continued to put on a strong show in the September quarter, with Africa net income (before exceptional items) rising to Rs 232.3 crore from a net loss of Rs 207.9 crore a year back. Total revenue of Airtel Africa rose nearly 13% to Rs 5,647.2 crore.

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