Airtel launches 2nd buyback phase as stakeholders set to get $100 million in payback deal

Joshua Fagbemi
Airtel

One of Africa’s leading telecommunications groups, Airtel Africa has launched the second phase of its share buyback. The process, which follows the conclusion of an initial $100 million share buyback, will see the telecom giant pay back $100 million to its shareholders.

Disclosed in a statement via the Nigeria Exchange Group (NGX) website on Monday, the company noted that the share buyback process is a replica of the first phase which started in March and ended in August 2024. The new phase is scheduled for commencement on Monday. 

Airtel logo

The company stated that the second buyback phase is in line with its commitment to see through Airtel’s existing capital allocation policy. This is targeted at reinforcing the company’s continued growth potential, the consistent cash accretion at the holding company level, and the balance sheet’s strength.

Explaining the share buyback process, Airtel explained that it will be executed in two tranches. The first, which is expected to conclude latest April 24, 2025, is set to target a maximum of $50 million.

To facilitate the process, Airtel Africa said it has entered into an agreement with Barclays Capital Securities Limited (Barclays), which will oversee on-market purchases of the company’s ordinary shares. “Under this agreement, Barclays will act as riskless principal and will make decisions independently of the Company. ” Airtel explained.

In terms of regulatory compliance, the telecoms company expressed that any purchases of ordinary shares in line with the project would be executed with adherence to certain pre-set parameters set out in the agreement with Barclays. It will also comply with Airtel’s general authority to repurchase ordinary shares approved by its stakeholders.

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At the general meeting held in July, shareholders gave the Company authority to purchase a maximum of 374,141,187 ordinary shares. Following the completion of the previous buyback, the remaining authority amounts to a maximum of 328,842,995 ordinary shares.

The buyback process represents an opportunity for stakeholders to benefit from the company’s decision to optimize its capital structure.

Airtel’s buyback explainer 

According to the Nigerian Exchange (NGX), Airtel Africa is the second-most valuable company with a market capitalization of N8.11 trillion. This spells a 13.2 per cent share of the entire equity market.

As part of Airtel’s plan to reduce its capital, the company embarked on a buyback programme in February following the release of its nine-month results up to December 2023. 

This 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,” the company said in February. 

For the first buy-back tranche which commenced in March and ended in August 2024, it amounted to a maximum of $50 million. 

Airtel worked in collaboration 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 deal, Citi acted as a riskless principal and made independent decisions.

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In Airtel Africa’s latest financial statement during its half-year 2024 report, the company reported a 19.9 per cent increase in revenue in constant currency despite a 9.7 per cent decline in reported currency due to exchange rate challenges. It also recorded a customer base expansion of 6.1 per cent to 156.6 million and a rise in mobile money penetration.

The company attributes this growth to an expanded customer base and increased data usage, with a 10.4 per cent increase in data customers to 66 million. Data consumption per user rose by over 30 per cent, emphasizing the region’s growing reliance on mobile data.

Airtel Nigeria, the second-largest telecom operator in Nigeria behind MTN, showed a rise in data usage with a 44.4 per cent increase in constant currency revenue. This was driven by both the expanding customer base and data consumption. Voice services also showed resilience with a 23.0 per cent increase in constant currency, despite regulatory restrictions requiring compliance with SIM registration mandates.

Meanwhile, Airtel Nigeria experienced the most significant currency-related impact, with a reported 44.3 per cent revenue decline in dollars, but constant currency growth of 35.6 per cent. This divergence highlights the steep depreciation of the naira, which has affected both earnings and operational costs.

Also Read: Airtel Nigeria appoints Dinesh Balsingh as MD/CEO.


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