Airtel Africa has bought back $25.8 million worth of its shares since the start of its $100 million share buyback programme on March 1, 2024.
The share buyback programme, currently in its first phase, 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).
This phase, scheduled to conclude by August 31, 2024, aims to repurchase $50 million worth of shares.
According to a corporate notice on the NGX, the latest purchase occurred on June 21, 2024, involving 572,700 ordinary shares bought at an average price of 118.64 pence.
About Airtel Africa’s share buyback programme
In 2019, Airtel Africa was initially listed on the London Stock Exchange, followed by a cross-border secondary listing on the Nigerian Stock Exchange. The company debuted 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.
Despite reporting a net loss for the 2023/2024 fiscal year, the share buyback was announced in February 2024. However, in the press release announcing the share buyback, it was noted,
“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.”
How the shares are being bought
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 canceled all its deferred shares, which totaled 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 canceled shares was transferred to the company’s distributable reserves.
As of June 24, 2024, the group has repurchased and canceled 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 canceled shares, approximately $9.6 million, will be transferred to a capital redemption reserve.
To carry out the first phase of the buyback, Airtel Africa entered into an agreement 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.