Airtel Africa plans London listing to cut $16 billion debt

The initial public offering by Airtel Africa Ltd. would comprise new shares and the sale would seek a free float of at least 25 per cent, the company said in a filing on Tuesday. 

Airtel is Africa's second-largest mobile operator behind Johannesburg-based MTN Group Ltd. with almost 100 million subscribers across 14 countries including Nigeria, Kenya and Tanzania.

Shares of Airtel Africa could start trading on the London Stock Exchange in June, reports citing people familiar with the matter said earlier this month. 

Airtel Africa already raised $1.25 billion last year from investors, including Temasek Holdings Pte and SoftBank Group Corp, giving it an equity valuation of about $4.4 billion.

A successful IPO will help the company kickstart a "stronger growth phase" in Africa, Bharti Airtel Chief Executive Officer Raghunath Mandava told reporters. The continent's youthful population and potential for more high-speed 4G capacity make it a big opportunity for expansion, he said.

Africa Airtel will also seek to expand its mobile-payment business, which has 14.2 million customers. Wireless operators in Africa are investing heavily in mobile-payment services to meet high demand from customers in countries such as in Nigeria, Kenya and Ghana where formal banking infrastructure is scarce, 

The company will also consider a local listing in Nigeria, according to the IPO filing, on the lines of market leader MTN, which listed stock in Lagos earlier this month to meet demand from regulators and local investors. 

Airtel is the second-biggest carrier in Nigeria, Africa's most populous country, and the market makes up more than a third of overall revenue.

Sunil Mittal-controlled Bharti Airtel, however, is fighting a costly battle in India with billionaire Mukesh Ambani's upstart Reliance Jio Infocomm Ltd, losing revenue, profit and market share in the process.

Airtel's earnings have shrunk and debt soared since Reliance Jio stormed the market in 2016 with free calls and cheap data. The New Delhi-based company is counting on some asset sales, a rights issue and lately the Africa unit's London IPO to bolster its finances.

Bharti Airtel has been struggling to add subscribers in a saturated Indian market amid a tariff war, and has used one-time gains to shore up its profits for at least four quarters in a row. 

In February, Airtel unveiled plans to raise as much as Rs. 32,000 crore for a war chest to take on Jio as well as to prepare for an impending 5G airwaves auction. Of that, it raised about Rs25,000 crore this month through a rights issue.