Airtel Africa has announced that it has spent $25.8 million in the first phase of its shares buyback programme. The company which started its first phase of a $100 million share buyback programme on March 1, 2024, is scheduled to conclude by August 31, 2024, to repurchase $50 million worth of shares.
The share buyback programme involves transactions conducted on the London Stock Exchange. So far, Airtel Africa has acquired 19,178,228 ordinary shares at an average price of 106.05 pence per share, amounting to £20.34 million ($25.76 million).
According to a recent corporate notice on the Nigerian Exchange (NGX), the latest purchase occurred on June 21, 2024, involving 572,700 ordinary shares bought at an average price of 118.64 pence.
Airtel Africa was initially listed on the London Stock Exchange in 2019, this was followed by a cross-border secondary listing on the Nigerian Stock Exchange. The company was publicly listed for the first time on the Nigerian Exchange with an initial share price of N363 and a market capitalization of N1.364 trillion.
Since its listing, the company’s share price has surged by approximately 491.47%, reaching N2150 as of June 21, 2024. After five years on the exchange, during which it consistently posted profits, the group announced plans to return capital to its shareholders through a share buyback program.
The share repurchase was announced in February 2024, despite the company posting a net loss for the fiscal year 2023–2024.
However, the press statement announcing the repurchase of shares, reads, “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’s statement of equity for the fiscal year 2023/2024 reveals that the company has sufficient leverage for its share buyback program. This is because the group cancelled all its deferred shares, which totalled 3,081,744,577 ordinary shares, each with a nominal value of $0.50.
As a result, the share capital of $1.541 billion from these cancelled shares was transferred to the company’s distributable reserves.
As of June 24, 2024, the group has repurchased and cancelled 18,605,528 ordinary shares with a nominal value of $0.50 each, reducing the total number of ordinary shares of Airtel Africa to 3,738,973,276. The nominal value of the cancelled shares, approximately $9.6 million, will be transferred to a capital redemption reserve.
To carry out the first phase of the buyback, Airtel Africa agreed with Citigroup Global Markets Limited (Citi). Citi will buy up to $50 million worth of the company’s ordinary shares on the stock market. Then, the company will buy these shares back from Citi.
The group’s annual report indicates that it has incurred $41 million in transaction fees with Citigroup Global Markets Limited.