Airtel buys back 8.2% minority shareholdings to achieve 99.96% control of its Nigerian subsidiary

Airtel Nigeria, a subsidiary of Airtel Africa Plc, has announced the completion of a N61 billion buyback of 8.22 per cent of its shares from minority owners.

According to the statement signed by the company’s secretary, Simon O’Hara, and filed with the exchange, the current buyback is worth $147 million at a N415.07 exchange rate. This gives Airtel Africa Plc 99.96 per cent control of its largest subsidiary.

On October 4, the telecommunications company first announced plans to acquire its 8.27 minority shareholdings for $0.13 (N55.81) per share. 

If all minority shareholders chose to tender their shares, the total consideration would be NGN 61.24 billion. However, its estimates fell short by 0.05 per cent.

This announcement comes at a time when MTN Group Limited, Airtel Africa’s primary competitor, has opted to sell off more of its shares in MTN Nigeria Communications Plc to retail investors.

According to reports, MTN Group has begun an offer to sell 575 million ordinary shares in its Nigerian subsidiary to individual investors. 

According to MTN Group’s Chief Executive Officer, Ralph Mupita, the acquisition was the first in a series of public offerings planned for the Nigerian market.

The MTN group sale appears to be motivated by the desire to allow for broad-based ownership of MTN shares by Nigerian investors.

Opportunity on the Horizon

Similarly, the grounds for Airtel Africa’s minority stock buyback were not disclosed, but it is speculated that an opportunity in the Nigerian division is on the horizon.

The company’s shares on the Nigerian Exchange Limited are presently trading at N950.00 a share, up 11.53 per cent year to date.

The unaudited Q2 2021 figures for the company reveal a profit before tax of 133 per cent, or $259 million, and a profit after tax of 149 per cent, or $142 million, for the period ending June 30th, 2021. 

Progress made in its Nigerian division might have had an overall positive impact as Airtel Africa Plc reported a nearly 31% increase in revenue to $1.1 billion.

Airtel’s buyback of its Nigerian shares comes even as the central bank, last month, granted approval-in-principle to Nigeria’s third-most capitalised company, to manage a payment service bank.

This certification also allows the telecom company to function as a superagent in the country’s growing agency banking industry. 

Airtel has a presence in fourteen African nations and a mobile money business of $2.65 billion across the continent.

The company has recently qualified as an approved bidder in the forthcoming 3.5 gigahertz (GHz) spectrum auction for the deployment of fifth-generation (5G) networks in the country.

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