Airtel Africa reportedly purchased 8.6 million ordinary shares from Citigroup Global Markets Limited as part of an ongoing share buyback programme that began on March 1.
The buy-back programme entails repurchasing $100 million in Airtel Africa shares over 12 months.
The telco said the purpose of the buy-back programme is to reduce share capital and, by extension, minimize its debt obligations and operating costs.
Consequently, all shares purchased through the buyback programme will be canceled. So, with fewer Airtel shares in circulation, the remaining shareholders assume a higher stake in the company and a higher return on future dividends. The programme will give Airtel more control.
The company has stated that acquiring ordinary shares through the buy-back programme will be consistent with the criteria outlined in its contract with Citigroup.
It will also follow the general permission granted by its shareholders for share repurchases. During the company’s general meeting on July 4, 2023, shareholders agreed to repurchase up to 375,815,150 ordinary shares.
The buy-back agreement is slated to happen in two parts. The first tranche, worth $50 million, will run for 7 months, from March to August 2024.
In the latest transaction, Airtel has repurchased 487,985 ordinary shares from Citigroup at a weighted average price of £103.94 ($131.70) per share.
Segun Ogunsanya, CEO of Airtel Africa, has explained that the board only decided to launch a share buy-back programme because Airtel’s businesses had generated significant revenue.
According to Ogunsanya, “The board believes that repurchasing its shares is an attractive use of its capital in light of the Group’s strong long-term growth outlook.”
Like most other companies with operations in Nigeria, Airtel Africa has faced macroeconomic challenges that have reduced profits. The telco’s financial statement revealed a revenue decline in December 2023, due to the naira’s devaluation, which affected its exchange rate.
Consequently, the telco recently outsourced several tower operations from its Nigerian subsidiary to IHS Towers to reduce its rising operating costs.
