Airtel Africa Plc has begun its share buy-back programme, as announced in its financial declaration on February 1, 2024, and the release of its nine-month results up to December 31, 2023.
This announcement was disclosed in the company’s notice to the Nigerian Exchange Limited (NGX) and the investment public.
A statement, signed by Alastair Jones, Investor Relations at Airtel Africa, outlines that the share buy-back programme will commence from February 29th. The programme will run up to 12 months, aiming to return up to $100 million to shareholders.
The share buy-back programme is expected to be phased over two tranches, with the first tranche commencing today and anticipated to end on or before 31 August 2024.
According to Airtel, the first tranche will amount to a maximum of $50 million adding that the Company has agreed with Citigroup Global Markets Limited (“Citi”) to conduct the first tranche of the buy-back and carry out on-market purchases of its ordinary shares with the Company subsequently purchasing its ordinary shares from Citi.
Under the agreement, the telecom firm stated that Citi would act as a riskless principal and would make decisions independently of the Company.
It noted that the sole purpose of the buy-back programme is to reduce the capital of the Company. As such, all shares purchased under the buy-back programme will be cancelled.
Part of the statement reads, “The buy-back programme reflects the significant progress made in recent years to reduce leverage and strengthen the Company’s balance sheet.
In light of the cash accretion at the holding company level, the current leverage and the consistently strong operating cash generation, the Company is well positioned to undertake this share buy-back to enhance shareholder returns which is consistent with its existing capital allocation policy.”
According to the company, the purchases of ordinary shares under the buy-back programme will adhere to specific pre-set parameters established in the agreement with Citi, as well as in compliance with the Company’s general authority to repurchase ordinary shares granted by its shareholders.
This authority was granted at the annual general meeting on July 4, 2023, where shareholders approved the purchase of a maximum of 375,815,150 ordinary shares.
The buy-back programme will also operate within the framework outlined in Chapter 12 of the Financial Conduct Authority’s Listing Rules and by the provisions of the Market Abuse Regulation (EU) No 596/2014, as incorporated into domestic law by the European Union (Withdrawal) Act 2018, as amended.
Furthermore, purchases may continue during any closed periods of the Company during the engagement period. However, it’s explicitly stated that no repurchases will be conducted on the Nigerian Stock Exchange.
The Company intends to enter into arrangements to commence a second tranche of the share buy-back programme in an amount of up to $50 million in due course.