Airtel Africa Plc has officially commenced its share buy-back program today, March 1, 2024, aiming to return up to $100 million to its shareholders over a period of up to 12 months.
The share buy-back initiative, divided into two tranches, will see the first tranche starting today, March 1, and expected to conclude on or before August 31, 2024. The initial tranche will encompass a maximum of $50 million.
The telecommunications and mobile money services company had previously announced its share buy-back program on February 1, 2024, following the publication of its nine-month (9M) results ended December 31, 2023.
Airtel Africa has partnered with Citigroup Global Markets Limited (Citi) to carry out the first tranche of the buy-back, conducting on-market purchases of its ordinary shares. Subsequently, the company will purchase its ordinary shares from Citi.
In a statement, Airtel Africa clarified, “Under this agreement, Citi will act as riskless principal and will make decisions independently of the Company. The sole purpose of the buy-back program is to reduce the capital of the Company. As such, all shares purchased under the buy-back program will be cancelled.”
Explaining the rationale behind the initiative, Airtel Africa emphasized, “This buy-back program 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.”
Elaborating on the specifics of the share buy-back program, the company stated, “Any purchases of ordinary shares under the buy-back program will be carried out in accordance with certain pre-set parameters set out in the agreement with Citi and in accordance with (and subject to the limits prescribed by) the Company’s general authority to repurchase ordinary shares granted by its shareholders from time to time.”
Airtel Africa intends to kickstart a second tranche of the share buy-back program, amounting to up to $50 million, in due course. However, it clarified that no repurchases will be made on the Nigerian Exchange, and purchases may continue during any closed periods of the Company during the engagement period.
The company assured that all purchases will adhere to the Financial Conduct Authority’s Listing Rules and the provisions of the Market Abuse Regulation (EU) No 596/2014.
As Airtel Africa embarks on this shareholder-oriented initiative, it aims to reinforce its commitment to enhancing shareholder value and optimizing capital allocation strategies in alignment with its business objectives and financial outlook.
