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Airtel Africa pledges distribution of 80% of cash flow as dividend to shareholders

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Ahead of its secondary listing on the Nigerian Stock Exchange (NSE), Airtel Africa Plc unveiled plans to distribute 80 per cent of its free cash flow as dividend to shareholders.

The company had announced the postponement of its cross border secondary listing of 3,758,151,504 ordinary shares on the NSE slated for Friday, July 5, 2019.

The postponement came after its London Stock Exchange (LSE) primarily listing at an offer price of 80 pence per ordinary share.

A secondary listing is when securities already listed on a primary exchange are subsequently listed on other securities exchanges, with the Issuer not subjected to the full requirements applicable to listing on the other securities exchange(s) at which it seeks a secondary listing.

According to the company, it plans to distribute to shareholders a minimum of 80 per cent of consolidated free cash flow as long as a ratio of net debt to EBITDA between 2 to 2.5 times is maintained.

The telecoms giant said the postponed listing on the floor of the NSE was to ensure that the company meets all the post NSE approval pre-requisites for listing on the exchange.

Speaking in Lagos at the company’s facts before listing, its Managing Director, Segun Ogunsanya, said the listing would be done after fulfilling regulatory requirements.

Subsequently, shares of Airtel Africa with operations in 14 African countries would be listed at N363 per share, adding a total of N1.364 trillion to the market capitalisation of the Nigerian Stock Exchange

Ogunsanya added that the company plans to leverage on data, voice and mobile money penetration to grow its earnings.

Chief Executive Officer of NSE, Oscar Onyema, said the shares of the company were expected to be listed on the main board of the NSE making Airtel Africa the first telecom company to simultaneously list on both exchanges.

According to him, this listing serves to deepen the telecoms and technology sector for investors and provides an opportunity for a wider group of Nigerians to be part of the African telecoms growth story.

He said, “This listing is a promising development in Africa with Airtel Africa being the second company to have its ordinary shares listed on both the London Stock Exchange and the Nigerian Stock Exchange.

“This gives credence to the successful partnership between the two exchanges and we encourage similarly situated companies to explore the different opportunities for raising capital on the Exchange’s platform. Furthermore, it shows the confidence Airtel Africa has in our platform, which has a total market capitalization of N25.20Tn across various asset classes,” he said

He added that the exchange would continue to support the Telecom Industry and the real sector by promoting efficient capital formation and allocation, enabling industries to raise long-term funds for growth & expansion of their business

Recall that NSE had recently granted a waiver to Airtel Africa to list its shares on the exchange without meeting the minimum requirement of 300 shareholders as of the day the listing was approved by the national council of the NSE.

In an interactive session with Journalists, the Head, Listing Regulation of the NSE, Godstime Iwenekhai said after the book building by the company, about 130 shareholders subscribed to issue, which is below the 300 shareholders requirement of the exchange.

However, he said the firm has a free float of 25 per cent across the London stock exchange and the NSE, above the exchange requirement of 10 per cent for cross boarder listing.

Iwenekhai explained that the rules of the NSE’s cross boarder listing was developed in such a way that it can grant exemption or waivers to attract cross boarder listing to the exchange and deepen the market.

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