Airtel Africa, a major player in telecommunications and mobile money services across 14 African nations, has announced the initiation of the second tranche of its $100 million share buy-back programme.
This latest phase is a significant step following the completion of the programme’s first tranche earlier this year.
The buy-back programme, which commenced today, aims to enhance shareholder value by reducing the company’s capital through the repurchase and cancellation of its own shares.
The second tranche is expected to conclude by December 19, 2024. Airtel Africa has engaged Citigroup Global Markets Limited (Citi) to facilitate this phase of the buy-back.
Under this agreement, Citi will conduct on-market purchases of Airtel Africa’s ordinary shares, with the company subsequently acquiring these shares from Citi.
Citi will operate as a riskless principal and will make purchase decisions independently of Airtel Africa.
“The purpose of this buy-back programme is to reduce the capital base of the Company, thereby benefiting our shareholders through increased value per share,” stated a spokesperson from Airtel Africa. “All shares repurchased under this programme will be cancelled.”
The share buy-back transactions will be conducted within the framework of pre-set parameters outlined in the agreement between Airtel Africa and Citi.
These transactions will adhere to the guidelines established by the Company’s general authority to repurchase shares, as granted by its shareholders during the annual general meeting held on July 3, 2024.
At that meeting, shareholders approved the purchase of up to 374,141,187 ordinary shares.
In compliance with regulatory standards, the buy-back will be conducted according to Chapter 9.6 of the Financial Conduct Authority’s UK Listing Rules and the Market Abuse Regulation (EU) No 596/2014, as incorporated into UK domestic law.
Market Impact and Outlook
This strategic move comes as Airtel Africa seeks to optimize its capital structure and deliver value to its investors.
The share buy-back programme is anticipated to reduce the number of outstanding shares, potentially increasing the value of each remaining share and reflecting positively on the company’s stock performance.
The commencement of the second tranche follows the successful execution of the first tranche, demonstrating Airtel Africa’s commitment to shareholder returns and capital management.
The company’s decision to continue with the buy-back programme highlights its confidence in the long-term growth prospects and stability of its operations across the African continent.