Airtel Africa faces listing problems as debut on NSE postponed

The planned debut of Airtel Africa Plc on the Nigerian Stock Exchange (NSE) has been postponed from the scheduled date of Friday, July 5, to Monday, July 8, 2019. Having listed primarily on the London Stock Exchange (LSE) last week, the company is issuing total shares of N1.36 trillion in a Cross Border Secondary Listing.

At a pre-listing media interactive session yesterday, Airtel disclosed that it would be listing 39, 227,968 ordinary shares of 60 cents at N363 per share, preparatory to the main listing session on the NSE.

The postponement follows Airtel’s failure to meet the pre-listing requirement of a minimum of 300 shareholders needed to list on the Main Board of the Exchange. NSE had granted Airtel a waiver to meet that requirement once its shares are officially registered, with the listing initially set for today.

But according to the Exchange, the latest development was necessitated by the need to ensure that Airtel meets all the post-NSE approval pre-requisites for listing. Meanwhile, the company’s shareholders in London can now trade their shares on the Nigerian bourse, NSE’s Head of Trading Business, Jude Chiemeka, revealed yesterday.

The latest setback in the listing process of the Airtel Africa – a subsidiary of India’s Bharti Airtel and the second largest mobile network operator in Africa by subscribers – is an accurate representation of the ‘headache’ the company is having going public in a dual listing

The telecoms company had previously listed on the London bourse last Friday but closed its first trading day as one of the worst debuts on European exchanges this year despite offering shares below its valuation. 

After its stock opened at 77 pence against the listing price of 80 pence per share (a loss of 3.75 percent), Airtel Africa plunged on the LSE, with its price dropping as much as 16 percent to 67 pence per share.

On the poor showing in London, a fund manager at Scottish Investment Trust Plc, Ally McKinnon, said Airtel Africa may be suffering from broader investor unease about telecom carriers in emerging markets. According to him, phone companies were popular during the investment boom in so-called BRIC (Brazil, Russia, India, and China) stocks but they can be at risk of state intervention. An example is MTN Group’s multibillion-dollar battle against the Nigerian government over taxes and fines.

In Nigeria, however, Airtel’s failure to meet shareholders’ requirement borders on the company’s route to the stock market, Nairametrics writes. This is because the listing process, which is by way of book building, focuses on qualified institutional investors and high-end individuals at this initial stage.

Despite waiving the company to list, the NSE has described the Airtel’s IPO as below listing standard (BLS) and should the network operator eventually fail to meet the shareholder requirement, it risks being classified with a Compliance Status Indicator (CSI) code – similar to the ‘buyer beware mark’. The NSE has said it will provide further communication on the issue when all the conditions for the listing in its market have been met.

The weak market showing for the African carrier in London and subsequently the listing troubles in Nigeria come as parent Bharti Airtel struggles back home with mounting debt. Proceeds from the IPOs are to be deployed in helping the India-based firm reduce debt while it prepares to upgrade its mobile network to fifth-generation (5G) technology.

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