Airtel Africa commences $50m tranche-2 share buyback programme

Joy Agwunobi

Airtel Africa is taking leaps in its financial strategy by launching the second phase of its $50 million share buyback programme. This move is part of the company’s broader effort to strengthen its financial position and streamline its operations amidst fluctuating market conditions.

The announcement, made through the Nigerian Exchange (NGX), marks the commencement of the second tranche of the buyback programme, which was initially outlined on February 1 and March 1, 2024.

Over the course of the next 12 months, Airtel Africa plans to repurchase 34,896,112 ordinary shares from Citigroup Global Markets at an average price of 110.35p per share. This phase of the buyback is expected to conclude by December 19, 2024, with Citigroup acting independently under a riskless principal agreement to manage the purchases based on predetermined conditions.

The buyback, which was approved by shareholders during the company’s annual general meeting on July 3, 2024, allows Airtel Africa to repurchase up to 374,141,187 ordinary shares. This decision comes as the company navigates mixed financial results; reporting a 133.6 per cent year-on-year increase in pre-tax profits to $74 million in the second quarter of 2024, while also facing a 16.1 per cent decline in revenue, from $1.37 billion to $1.15 billion, and a 27.4 per cent  drop in operating profits, down from $462 million to $335 million, compared to the same period in 2023.

The company explained that the main goal of the share repurchase is to reduce its share capital, which in turn is expected to decrease its debt obligations and lower the operating cash expenses associated with holding excess share capital. It stated that the  second phase of this buyback will be executed under the conditions previously agreed upon with Citigroup Global Markets.

According to Sunil Talder, Airtel Africa’s CEO, the programme is a key element of the company’s long-term plan to enhance customer experience and improve operational efficiencies. By repurchasing shares, Airtel Africa aims to decrease its share capital, which will in turn lower its debt obligations and reduce operating expenses associated with excess share capital. These financial adjustments are intended to position the company more favourably in the market, enabling it to focus on core operations without the burden  of high operating costs.