Efforts by the multi-national mobile telecommunications network operator Airtel to sell shares of the company on the Malawi Stock Exchange seem not to have gone down well with a cross section of Malawians as many are expressing reservations over the decision while the government has instituted an inquiry to scrutinize the process. This came as Airtel Africa which owns Airtel Malawi offers a total of 2.2 billion shares at a price of K12.69 per share on the Malawi Stock Exchange (MSE), allowing the public for the first time to own part of the telecommunications firm, a move which was welcomed in many other countries such as Nigeria when the company went public.
However, Malawi being a smaller economy compared to Nigeria, South Africa and Kenya, Airtel’s offer was the largest Initial Public Offer (IPO) in the history of Malawi Stock Exchange (MSE) listing. Moreso, there has been insinuations by some analysts that Airtel has not listed on the Malawi Stock Exchange in an honest way.
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A commentator who warned investors about the offer said that Airtel is largely owned by the Bharti family of India who manage it through an establishment called Airtel Africa registered in The Netherlands, adding that Airtel Malawi is composed of three companies which are Airtel Mobile (the Airtel we all see everyday as the face of the business), Airtel Mobile Money and Airtel Towers. “All the three companies above belong to one family from India. Out of those three, it is Malawi Towers and Airtel Mobile Money which actually make money by providing services to Airtel Mobile,” he said.
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But in the IPO by Airtel, the two companies which make the money are not part of the listing but the broke company, Airtel Mobile which is bankrupt and with no hope of recovering from its negative balance. “What the Bharti family is doing to Malawi is simply selling them that Sobo Orange Squash bottle but with no contents in it, hoping they will fill it with water” he said.
He warned that the offer is an empty shell that will make them take the whole whopping US$37 million out of Malawi, leaving you and me with nothing, but investment forms in our hands”. A proposition which he described as a dangerous scam approved and made legal by the Reserve Bank of Malawi and the Malawi Stock Exchange.
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In its official statement about the offer, Airtel Malawi managing director Charles Kamoto said that the decision to offer the IPO was taken by some of the company’s majority shareholders whom he said have disposed of their equity. He noted that the offer will remain open until January 31 2020 before announcing the results of the offer to the public on February 14 2020 and thereafter officially listing on the local shares market on February 24.
This listing will also enable the company to comply with Section 35 of the Communications Act of 2016, Regulation 26 (2) of the Communications (Telecommunications and Broadcasting Licensing) Regulations of 2016 and Clause 42.2 of the subsidiary’s operating licence, which requires the company to have at least 20 percent local Malawian shareholding. Airtel Malawi has since engaged Standard Bank plc to act as book runner and as lead transaction adviser for the company.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry