Picture: REUTERS
Picture: REUTERS

London  —  Airtel Africa, a subsidiary of Indian telecoms group Bharti Airtel, is considering a stock market flotation in London, it said on Tuesday as part of efforts to expand its data and mobile money services across Africa.

The company is aiming to raise about $1bn in a June equity offering, a source close to the deal said. Airtel operates in 14 African markets including the Democratic Republic of Congo, Kenya, Nigeria, Rwanda, Seychelles, Uganda and Zambia.

In 2018, the telecom operator raised $1.25bn from six global investors including SoftBank Group, Warburg Pincus and Temasek Holdings.

A further $200m  was raised in January from the Qatar Investment Authority (QIA), valuing the company at just under $5bn.

Airtel Africa is looking to trade on the main market of the London Stock Exchange, using its premium listing segment, which has more stringent rules than the European Union's minimum requirements, and sell 25%  of new shares to reduce existing debt.

The cash injection from existing investors has already helped to reduce Airtel Africa's net debt to $4bn in March, compared with $7.7bn in the previous year.

Its net income reached $83m  in the year to March, compared with a net loss of $49m a year earlier.

The telecoms operator is also seeking to list on the Nigerian Stock Exchange.

"The 14 countries where we operate offer strong GDP growth potential and have young and fast-growing populations, low customer and data penetration and inadequate banking infrastructure," chief executive Raghunath Mandava said in a statement.

"These fast-growing markets provide us a great opportunity to grow both our telecom and payments businesses."

Indian owner Bharti Airtel last year ditched the IPO of African mobile phone mast firm Helios Towers, without giving any reason.

A source said at the time that the expected IPO price was too low for shareholders who had been valuing the firm at as much as $2.8bn.

Proceeds from the European IPO market have fallen to their lowest in more than a decade in the first three months of 2019, according to Refinitiv data.

Airtel Africa's debut on the London market would follow that of Middle Eastern payments companies Finablr and Network International, which started trading over the past couple of months.

The company has appointed JP Morgan, Citigroup, BofA Merrill Lynch, Absa Group, Barclays Bank, HSBC, BNP Paribas, Goldman Sachs International and Standard Bank as advisers.

Reuters