Airtel Uganda, the telecoms company, will enable local investors to become shareholders under plans to list on the Uganda Securities Exchange.
Airtel Africa, the Ugandan subsidiary’s parent company, said in a notice to the London Stock Exchange that it is waiting for regulatory approval from the Capital Markets Authority of Uganda to publish the initial public offering prospectus and, after, sell its shares on the USE, including via its mobile money platform.
“The offer is expected to result in meaningful local ownership of Airtel Uganda Limited, with preference to be given to Ugandan investors, and to contribute to the development of the capital markets in Uganda,” the notice said. It added that the shares will be available on Airtel’s mobile money service “in addition to traditional channels, in an effort to increase retail participation.”
Airtel Uganda, the local subsidiary of the Indian Bharti Airtel Limited, acquired Celtel Uganda, which launched in 1995 as the country’s first mobile operator, in June 2010. It is one of two dominant telecoms operators, alongside the somewhat larger MTN Uganda, and reported revenues and net income of Shs1.6 trillion and Shs326bn respectively in the year that ended in December 2022.
It is a legal requirement, imposed by regulations that came into force in 2019 and 2020, for national telecom operators to list at least 20 per cent of their shares on a local stock exchange, Airtel Africa acknowledged in the statement. “Airtel Uganda’s principal regulator, the Uganda Communications Commission, has set a deadline of 16 December 2023 for meeting this requirement to list.”
The last company to list on the USE – a bourse that is not exactly renowned for its vitality – was MTN Uganda, Airtel’s biggest local rival, in December 2021. In 2018, the chief executive of MTN Uganda’s parent company said that Ugandan government officials had insisted that it concedes to listing at least 20 per cent of its local operation on the USE as a prerequisite for having its operating licence renewed.
A notable advocate for that requirement was none other than President Yoweri Museveni, who argued that the foreign-owned telecoms repatriated most of their profits, hurting the local economy in the process. To mitigate that, Mr Museveni said that they should list on the USE.
Bharti Airtel, an Indian telecom company, is the majority shareholder in the London-listed Airtel Africa PLC. After the Ugandan IPO, Airtel Africa will retain a shareholding of 80 per cent in Airtel Uganda.
Absa Bank Uganda has been appointed to advise on the transaction process, while EY was selected as the reporting accountant. Other advisers are Crested Capital, the leading broker, and Katende Ssempebwa and Company Advocates, the legal adviser.
“Airtel Uganda has offered mobile telecommunications services in Uganda since 1995 and is currently the co-leader in the market with 49 per cent revenue, and 47 per cent subscriber market share, respectively,” the local subsidiary said in its intention to float announcement on its website. “The Company has 14.3 million active subscribers across 146 districts in Uganda.”
