Airtel Africa Buys Back More Shares from Citigroup

Airtel Africa has made a notable move of repurchasing its shares from Citigroup Global Markets Limited. Airtel bought back 8.6 million ordinary shares from Citigroup.

The buyback plan was initiated on March 1, 2024. The unique move is part of a much broader strategy of buying back shares.

According to the popular telco company, the plan aimed to reduce the share capital. Consequently, this reduces Airtel’s obligations and costs of operations, which has increased due to inflation.

Airtel Africa also asserted that any shares repurchased through this strategy would be taken out of circulation permanently. The company stressed that this action will reduce the number of shares available in the market. It also leads to an increase in the value of shares held by the remaining investors.

The plan will guide to a richer return from future dividend distributions because it will be distributed among a smaller circle of shareowners.

Segun Ogunsanya, CEO of Airtel Africa, declares that Airtel’s businesses have generated significant cash, hence the decision of the board to launch a share buy-back program.

Furthermore, he stated, “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.”

Airtel Africa Buyback Shares To Make More Effective Decisions

Also, Airtel Africa views this program as a way to reduce share owners’ control and authority over the company’s operations. With fewer shares publicly traded, the company’s decision-making process could become less diluted, allowing for more assertive and potentially more effective corporate solutions.

Airtel Africa has assured that the enactment of this share buyback will be in full compliance with the established terms and conditions. The terms and conditions are specified in the contractual arrangement with Citigroup.

This indicates a careful approach to the share repurchase, ensuring that it aligns with legal and financial regulations.

At the company’s general meeting on July 4, 2023, the shareholders consented to the buyback of up to 375,815,150 ordinary shares. Also, they provided the company with the authorization to proceed with the repurchase strategy.

This share buyback is structured to occur in two distinct phases. The initial phase involves an expenditure of $50 million. It is scheduled to span a period of seven months, extending from March to August 2024.

In one of their recent buyback transactions, Airtel Africa successfully repurchased 487,985 ordinary shares directly from Citigroup.

These shares were bought at a weighted average price of £103.94, equivalent to $131.70, per share. However, this transaction forms a part of the broader strategy to manage the company’s share capital judiciously.

Also, if you found this piece useful, kindly drop a nice comment. Follow us on X or Twitter, @SilicoAfriTech.