6 Banks Jostle for About $6.6 Billion Worth Airtel Africa IPO

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Airtel

Following the announcement of its intention to get listed (as earlier reported), about six banks are believed to be pitching Indian telco Bharti Airtel, offering proposals on potential valuations and places of listing for its Africa operations. The unit is reportedly worth around $6.6 billion.

Though, there are no formal proposals yet, some banks are reported to be holding informal discussions with Airtel. Such banks include Bank of America Merrill Lynch, Barclays and UBS.

Bharti Airtel International Netherlands BV (BAIN BV), with its headquarters in the Netherlands, is the holding company controlling its African operations. According to The Guardian, the company could have an enterprise value of $6.6 billion, six times its EBITDA. An equity valuation would bring it to $1.1 billion after factoring in an estimated $5.5 billion net debt.

Regarding the place of listing, Airtel’ s management would favour London but that question still remains to be decided. Although, Airtel’s Ex Vice Chairman, Mr Akhil Gupta, thinks London would be a good venue to get listed.

Bharti Airtel International (BAIN)
Bharti Airtel International (BAIN)

Airtel has struggled to replicate its Indian model on the African continent and repaid a bumper loan of $ 9 billion since its acquisition of Zain Africa. It started to deleverage its debt by selling 8,300 mobile towers in Africa for $1.7 billion to various tower companies. It then went on with selected sales (Sierra Leone, Burkina Faso ) and mergers (Ghana, Rwanda ).

Furthermore, the IPO is like to be a ‘dual-track process’ which means the company is planning go down the path of conducting an initial public offering while also pursuing a possible Mergers and acquisitions (M&A).

Airtel acquired Zain’s Africa business for $10.7 billion in 2010. Standard Chartered and Barclays were the financial advisers for the deal. 


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