IPO - Afrikan Heroes

Going On IPO In Cameroon Can Attract Companies 25% Corporate Tax Rate Instead Of 33% Going Forward

November 9, 2020

African startups are not notorious for going public, especially through Initial Public Offerings (IPO) on stock exchanges, but Cameroon wants to change that narrative. To that effect, the central African country is introducing a new provision under the proposed finance law of 2021. This week, November 12, parliament in Yaounde will tear through a government proposal, under the 2021 finance law, relating to the promotion of the stock market sector. By the terms of the proposed law, companies which gom ahead to list their ordinary shares on the Central African Securities Exchange (Bvmac) will benefit from the application of reduced rates of tax on companies as follows:

A reduced rate of corporation tax of 25%, instead of the existing 33% corporation tax rate; and a reduced rate of 1.5% of the deposit and the minimum collection of corporation tax.
Also, companies that issue securities on the Bvmac bond market benefit from the application of a reduced corporate tax rate of 25%.

*The best and worst performing African stock exchanges in 2019. Source: Securities Africa*

Cameroon IPO tax Cameroon IPO tax

In the same vein, companies which are deemed to make a public offering in accordance with the provisions of the Ohada Uniform Act relating to commercial companies and economic interest groups, and which agree to admit and exchange all or part of their equity and debt securities listed on the Bvmac, benefit from the application of a reduced corporate tax rate of 25%, from the date of admission of the securities.

As of July 31, 2020, Bvmac, based in Douala, the Cameroonian economic capital, posted a capitalization of CFAF 149.5 billion, for only four companies listed in the entire Cemac region (Cameroon, Central Africa, Gabon, Equatorial Guinea and Chad). These are the Cameroonian companies SEMC, Socapalm, Safacam and SIAT Gabon. Which means that a lot of companies are still reluctant to go public.

In terms of equities, the capitalization of Bvmac reached around 1% of Cameroon’s GDP, while those of the stock exchanges of Nigeria and West Africa, based in Côte d’Ivoire, already reached 10 respectively and 26% of the GDP of the countries concerned in 2018, according to the Absa Africa Financial Markets Index.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Transsion, Africa’s top mobile phone seller On Its IPO In China

September 30, 2019

With over 124 million phones sold in 2018, Transsion, makers of Tecno phone brand and Africa’s top mobile phone seller has gone on its first public offering in China, listing on Shanghai’s STAR Market, selling a share at 35.15 yuan (≈ $5.00), and ending up raising 2.8 billion yuan (or ≈ $394 million). Headquartered in Shenzhen, Transsion is a top-seller of smartphones in Africa under its Tecno brand. The company has also started to support venture funding of African startups.

Here Is All You Need To Know

Transsion issued 80 million A-shares at an opening price of 35.15 yuan (≈ $5.00) to raise 2.8 billion yuan (or ≈ $394 million).
A-shares are the common shares issued by mainland Chinese companies and are normally available for purchases only by mainland citizens.
Transsion’s IPO prospectus is downloadable (in Chinese) and its STAR Market listing application available on the Shanghai Stock Exchange’s website.
STAR is the Shanghai Stock Exchange’s new Nasdaq-style board for tech stocks that went live in July with some 25 companies going public.
Transsion plans to spend 1.6 billion yuan (or $227 million) of its STAR Market raise on building more phone assembly hubs and around 430 million yuan ($62 million) on research and development, including a mobile phone R&D center in Shanghai, a company spokesperson said.
The IPO comes after Transsion announced its intent to go public and filed its first docs with the Shanghai Stock Exchange in April.
Listing on STAR Market puts Transsion on China’s new exchange — seen as an extension of Beijing’s ambition to become a hub for tech startups to raise public capital. Chinese regulators lowered profitability requirements for the STAR Market, which means pre-profit ventures can list.
Transsion’s IPO is the second event this year — after Chinese owned Opera’s venture spending in Nigeria — to reflect greater Chinese influence and investment in the continent’s digital scene.
If Transsion’s IPO enables higher smartphone conversion on the continent, that could enable more startups and startup opportunities — from fintech to VOD apps.
Another interesting facet to Transsion’s IPO is its potential to create greater influence from China in African tech, in particular as the Shenzhen company moves more definitely toward venture investing.

Transsion Presence In Africa

Transsion’s IPO comes when the company is actually in the black. The firm generated 22.6 billion yuan ($3.29 billion) in revenue in 2018, up from 20 billion yuan a year earlier. Net profit for the year slid to 654 million yuan, down from 677 million yuan in 2017, according to the firm’s prospectus.

Transsion sold 124 million phones globally in 2018, per company data. In Africa, Transsion holds 54% of the feature phone market — through its brands Tecno, Infinix and Itel — and in smartphone sales is second to Samsung and before Huawei, according to International Data Corporation stats.

Transsion has R&D centers in Nigeria and Kenya and its sales network in Africa includes retail shops in Nigeria, Kenya, Tanzania, Ethiopia and Egypt. The company also attracted attention for being one of the first known device makers to optimize its camera phones for African complexions.

On a 2019 research trip to Addis Ababa, TechCrunch learned the top entry-level Tecno smartphone was the W3, which lists for 3,600 Ethiopian Birr, or roughly $125.

In Africa, Transsion’s ability to build market share and find a sweet spot with consumers on price and features gives it prominence in the continent’s booming tech scene.

Africa already has strong mobile-phone penetration, but continues to undergo a conversion from basic USSD phones, to feature phones, to smartphones.

Smartphone adoption on the continent is low, at 34%, but expected to grow to 67% by 2025, according to GSMA.

This, added to an improving internet profile, is key to Africa’s tech scene. In top markets for VC and startup origination — such as Nigeria, Kenya, and South Africa — thousands of ventures are building business models around mobile-based products and digital applications.

In August, Transsion funded Future Hub teamed up with Kenya’s Wapi Capital to source and fund early-stage African fintech startups.

China’s engagement with African startups has been light compared to China’s deal-making on infrastructure and commodities — further boosted in recent years as Beijing pushes its Belt and Road plan.

So in coming years, China could be less known for building roads and bridges in Africa and more for selling smartphones and providing VC for African startups.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Home-sharing Startup Airbnb, Valued At $31 Billion, Is Planning Its IPO in 2020

September 20, 2019

Airbnb has announced it plans to go public in 2020. The startup did not specify an IPO timeline beyond “during 2020.”

Airbnb has not clarified whether it has confidentially filed its S-1 IPO paperwork, which would include basic financial information for potential investors to consider. An Airbnb spokesperson declined to comment when asked whether the paperwork has been filed.

The home-sharing rental startup was last privately valued at $31 billion in September 2017, according to PitchBook.

Airbnb has teased potential IPO plans as recently as March of this year, with cofounder Nathan Blecharczyk saying that the company “had not decided if we will go public in 2019.”

“We have already said that we are taking the steps to be ready to go public in 2019. That doesn’t mean we will go public in 2019,” Nathan Blecharczyk, an Airbnb cofounder, told Business Insider in a March email interview.

The company hasn’t clarified how it plans to list its shares, either. Airbnb was considering a direct listing in June, Reuters reported.

A number of startups have gone public in 2019 to mixed results. Uber and Lyft went public earlier this year, and both companies have spent most of the time since trading below what they opened at. WeWork’s IPO plans — which were recently postponed until at least October — were derailed shortly after the startup publicly filed its S-1 paperwork, which raised questions about the company’s CEO, governance, spiraling losses, and unclear path to profitability.

Read also: Is Uber Really Not A Profit Making Organisation?

Tech startups Zoom, Slack, PagerDuty, CloudFlare, and Pinterest went public in 2019 and are currently trading above their IPO price.

Airbnb’s initial public offering has been heavily anticipated by Wall Street. The company had revenue of over $1 billion in the third quarter of 2018, according to TechCrunch. In November, former Amazon vice president Dave Stephenson joined Airbnb, feuling the market’s hopes that the company was preparing to go public.

In March, Airbnb cofounder Nathan Blecharczyk cast doubt on whether the company would go public any time soon, but had hinted that it was taking steps towards an initial public offering.

Airbnb has already made its CEO Brian Chesky one of the richest tech founders in America, and the company’s origin story is a quintessential rags-to-riches tale of success in Silicon Valley.

Chesky, a 37-year-old former bodybuilder, founded the company with two former roommates in August 2008, which started out renting air mattresses in a room in San Francisco. The company struggled with investor support at first, but it picked up a $600,000 seed investment in 2009 and its growth quickly accelerated.

In the years that followed, Airbnb picked up venture capital investments from industry heavyweights. Its third VC round in 2011 raised $112 million from investors including Crunchfund, General Catalyst, and Jeff Bezos’ venture capital group at a $1.3 billion valuation. It picked up another $1.6 billion in venture capital in 2015 and $1 billion in 2017, and has raised a grand total of $4.4 billion to date, according to PitchBook.

The company has recently branched out beyond its primary business model. In November it announced Backyard, an initiative that will explore building new homes specifically designed to accommodate short-term rentals. Backyard was slated to test prototypes by late 2019, according to CNBC.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world

Why Exit by IPO Is Healthier For Startup Ecosystems

September 6, 2019

When Egyptian financial technology (fintech) company Fawry went public on 8 August, it was a fantastic moment for the tech ecosystem, not just for Egypt, but the Arab world, and Sub-Saharan Africa as a whole.

Preferring IPO to Private Placement

The technology startup sector has, over the past few years focused too much on fundraising with an aim to exit via acquisitions to companies abroad. This has become the ultimate sign of success for startups, but while it has been the dominant way investors make money and entrepreneurs and their employees realise financial value, it leaves the regional ecosystem wanting.

When I was raising funding for Aramex back in 1996, we were trying to do a private placement which did not get much appeal in the region. People questioned whether Aramex could survive in the face of formidable competition from the giants of the industry even at a mere valuation of $30 million, so we decided to take the company public.

“Great idea, but where do we do that?” I told my partner Bill Kingson. Certainly not on any of the regional exchanges! Why? Because of all sorts of restrictions, from foreign investor restrictions, to small illiquid exchanges, to a restricted process of fund raising and book building, and interference by the regulator in company valuations rather than the market/investors.

“Oh well, let us then go to Nasdaq!”

We listed on Nasdaq in New York and stayed listed on it for five years, then we took the company private in 2002 and listed it again on the Dubai Financial Market (DFM) in 2005. Eleven years later, Aramex continues to be a public company in Dubai, 37 years after its founding.

Why IPO, And Not Acquisition?

While acquisitions can provide a boost for the ecosystem and can bring global investors to the region, initial public offerings (IPO) allow for a deepening of the ecosystem and gives more options to regional startups.

So why is it that companies that could IPO in the region do not even have it in their thinking to go public and why would a company like Jumia, which has its corporate office in Dubai lists in New York rather than on one of the Middle East regional exchanges?

Laying Foundation For Many More Startup IPO

There are several challenges currently in place and the following will need to change if we are to see more companies going public:

Foreign ownership laws: a lot of companies have registered themselves outside of the region to allow for foreign ownership, like the Cayman Islands or the British Virgin Islands. Why is that? The writing is on the wall, a lot of these investors are here, but they invest in entities that are offshore that allow for anyone to be an investor.
Track record of profitability: most of these exchanges require three years’ of profitability before they allow a company to IPO. This is not a restriction visible in most developed markets, Uber went public despite stating it may never make a profit. Investors should be given a choice of whether they invest or not, rather than have the regulator decide what will be a good investment.
Engage these scale-ups: engage the hundreds of companies that are scaling up in the region, talk to their investors, their founders and see what the regional exchanges need to do to get them to list in the region. Changing these laws and regulations will not hurt anyone, they have been tried and tested in the most developed exchanges in the world. Learn from them and make it happen here.
This will be a win-win for everyone. Someone needs to take the first step. Watch Fawry and learn from their experience.

Listing more companies creates deeper liquidity for our exchanges, which they all need. It is also the best way to democratise and to trickle down the benefits of companies like Aramex and Fawry, making liquidity available on the public market — where most of the region’s investors are based.

The bigger the exchange, the more funds there are, the greater the possibility to get investors and give their listed companies their fair value.

How Startups That Went Through The IPO Route Have Fared

Fawry managed to do very well in Egypt, it listed on the Egyptian Exchange at a share price of EGP6.46. After the first day of trading, its share price soared by 31 per cent to EGP8.48, valuing the company at $366 million. It seems regional exchanges can and will give you the valuation that you want.

IPOs give companies the ability to stay independent, keep the brand that they have worked so hard to build, generate liquidity and exits for their investors, create a liquidity option for their founders and employees while giving the general investor public a chance to participate in the success of these companies. It also encourages and widens the base for regional and even global institutional investors to invest in the region and generate healthy foreign direct investments (FDI).

This is exactly what happened with Aramex since it went public on the DFM. Employees enjoyed their stock options, founders were able to find their exits, regional investors had huge appetite for the share, and global investors waited in line to gain access to the share. The company stayed independent, continues to thrive, and retained its talented people and created a great platform to access funding from various financial institutions in the region.

Having the region’s tech and non-tech scale-ups IPO, means the stock exchanges become less dependent on traditional businesses like real estate, banks and insurance companies and can attain the diversity that reflects the new businesses of the 21st century, generating new wealth for a new generation that is currently building the businesses of the future.

Fadi Ghandour is the chairman of Wamda and founder of Aramex, one of the leading logistics and transportation companies in the Middle East and South Asia.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

At Last, Interswitch Is Ready For Its IPO, Hires JPMorgan

July 23, 2019

This could be a major victory of 2019 for Nigerian startups. For the second time in two years, Interswitch is signaling it is now ready to open its share portfolio up for public subscription. The unicorn startup is riding on the wings of the recent relatively successful listing by MTN Nigeria and Airtel Africa. This is seventeen years down the line for the digital payment solution.

Here Is What You Need To Know And How To Get Ready For Interswitch’s Shares

This could be a reality this time. Interswitch has already hired JPMorgan, Citigroup, Standard Bank for the share sale.
This listing could value Helios’s Interswitch at up to $1.5 billion
The listing would happen on the Nigerian Stock Exchange at the same time it is happening on the London Stock Exchange.
JPMorgan Chase & Co., Citigroup Inc., and Standard Bank Group Ltd. are among the firms working on an initial public offering, which may value the financial technology company at $1.3 billion to $1.5 billion, according to reliable sources.
Interswitch had earlier shelved its plans to list in 2016 after the price of crude oil fell dramatically, causing a contraction in Nigeria’s economy.

This Listing Is Drawing An Unclear Path For Africa’s Digital Startups

Just recall Fawry, the Egyptian startup poking at IPO. The startup was acquired by Helios Investment Partners halfway into its journey. Interswitch, originally founded by Mitchell Elegbe also sealed the same fate in 2011 when Helios Investment Partners, a private equity firm dedicated to making growth investments across Africa bit two-third hard into the startup and subsequently acquired a majority stake in the payment startup. Since then, Helios Investment has become Interswitch’s largest shareholder.

This would, of course, leave a big question on the longevity of African-led startups, and whether the popular exit strategy most startups in Africa are resorting is not acquisition.
Helios is among several private funds that specialize in investing in African assets as the economic recovery taking place across the continent bolsters investor sentiment and infrastructure plans.

A Look At Interswitch

Interswitch facilitates the exchange of value between service providers by providing a secure shared payment infrastructure and integrated message broker solutions for financial transactions, eCommerce, telecommunications value-added services, eBilling, payment collections, and disbursements. The company developed and administers Verve, the leading card scheme in Nigeria.

The displayed data on popular payment methods in stores, restaurants and other points of sale shows results of the Statista Global Consumer Survey conducted in Nigeria in 2017.

The Verve card, which is currently issued by banks in Nigeria, is the first and only chip and PIN card accepted across multiple payment channels including ATMs, Point of Sale (PoS) terminals, online, mobile and at banks, and enjoys the largest range of value-added services.

The company has been at the forefront of the development and growth of the e-payment sector in Nigeria, which is evidenced by its unique position of being the only switching and processing company connected to all banks in the country as well as to over 10,000 ATMs and 11,000 PoS terminals.

Aside from this, the company is the leading processor for MasterCard and the market leader in merchant acquiring/PoS, a segment that is still emerging and has the potential for tremendous growth in Nigeria.

The completion of the switchover from magnetic strip cards to chip and PIN cards in 2010, is expected to further accelerate growth and usage of e-payments across the country. Nigeria is the first country in Africa to have completed this migration and is one of the few countries in the world to have completed the migration under a year.

Why Are African Firms Rushing To List In London?

Interswitch’s dual listing in the U.K. and Nigeria is merely repeating what Airtel Africa Plc, the wireless carrier and a subsidiary of Indian parent Bharti Airtel Ltd did recently by simultaneously listing on the London and Nigerian Stock Exchange.

Recall that Jumia Technologies AG, dubbed the Amazon of Africa, listed in New York earlier this year, while Dubai-based payments firm Network International Holdings Plc went public in London. All of these recent events may not be unconnected with the recent invitation by the London Stock Exchange to investors around the world, particularly in Africa to come to invest in the Exchange.

Officials from the London Stock Exchange recently completed a roadshow in a bid to boost the LSE’s 115 African listings. The exchange is banking on partnerships with African exchanges, including those in Nigeria and Kenya, for dual listings, according to Director of Emerging Markets and International Markets Ibukun Adebayo.

“If a company has an international strategic growth plan, then the LSE is a perfect vehicle for the company to come and list,” Adebayo said Tuesday in an interview in Nairobi. “If the company is purely domestic and it needs to raise money in the domestic market and increase the number of investors available to it, then the LSE can help work with local partners.”

Firms already included in the LSE’s listing of Companies to Inspire Africa, which the exchange describes as the continent’s “most inspirational and dynamic private, high-growth companies are:

South Africa: Ad Dynamo International, Coega Dairy, Compuscan
Nigeria: Afriland Properties, Alpha Mead Group, ARM Life
Kenya: Acorn Group, BitPesa, Cellulant Kenya, Chandaria Industries, D.light
Ivory Coast: Azalai Hotel Abidjan, Cipharm SA, Clinique Procréa, Agriex Côte d’Ivoire
Angola: Aldeia Nova, Angola Energy Greentech, Kora Angola, WEZA
Egypt: Cairo Three A, Carbon Holdings, Eagle Chemical Group, Sambo Metals
Morocco: 10 Rajeb, Bricoma, Damandis Maroc, Ama Detergent, Medafrica Systems

There are 360 companies from 32 different countries across the continent, boasting an impressive average compound annual growth rate of 46 percent, up from 16 percent last year, according to Global Finance.

It says on average, each firm employs over 350 people, with an average compound annual employee growth rate of 25 percent.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Egyptian Startup Fawry Goes On Egypt’s Largest IPO

July 22, 2019

This is a major breakthrough for digital platforms across Africa. Less than 9 months after another technologically focused finance solution startup, Sarwa Capital, opened its shares for public subscription, Fawry, the Egyptian digital payment solution has announced it is ready to open itself to the public too by going on its First Public Offering (IPO )

Here Is What The IPO Is Going To Look Like

Although the IPO would come late August 2019 or early 2020, Fawry is only ready to list 36% or more of its stake in the company on the Egyptian Stock Exchange.
The company is eyeing proceeds between EGP 2 and 2.5 bn, which would make the offering the largest Egypt has seen since Emaar Misr raised EGP 2.28 bn in 2015.
It would also value Fawry at EGP 4.5–5.5 bn. The offering will consist of a substantial international component, with the roadshow is set to cover the GCC, European, US, and South African markets.
The offering will include a private placement for institutional investors and an initial public offering (IPO) for retail investors in Egypt at the same price, said investment bank EFG Hermes, which is managing the sale.
The offer price is not yet known as the bank did not give any indication on the expected offer price.
Fawry’s managing director this month told Reuters the company had begun preparing for the IPO on the Egyptian Exchange and that the process would be carried out in 2019 or early 2020.
Financial advisor FinCorp, which Fawry hired to conduct a fair value study, is due to submit its report to the Financial Regulatory Authority within two weeks, after which the book-building process will begin, the sources hinted.
Fawry’s expansion plans include increasing its points of sale, buying new payment machines, and developing Fawry Pay. Fawry also signed an agreement with Dubai Islamic Bank last month to launch a trial run of its services in the UAE this summer.

Here Is Why This IPO is Significant For African Technology Focused Startups

Fawry is owned by local and foreign investment banks and was founded in 2009. About 8% of its shares are in the hands of management and employees.

Fawry’s network processed 600.1 million transactions last year with a total value of 34.2 billion Egyptian pounds ($2.1 billion), EFG Hermes said in its statement.

Fawry made core profit of 152 million pounds in 2018, up 41.2% on the previous year, indicating the increasing viability of FinTech business model across Africa.

The last IPO by a private company on the Egyptian Exchange was financing solutions business Sarwa Capital last October.

Indeed, this IPO shows that Fintech in Africa has increasingly become more profitable as banks. The ability to pay dividends from profits is a major factor every business owner should have in mind before deciding to embark on IPO, and with Fawry which basically runs online with little or no physical presence doing so, this is a major announcement that digitally-focused businesses have finally come to stay.

This notwithstanding, so much credit has to go to the acquisition that happened as far back as 2015. In 2015, a consortium of international financial investors acquired a majority stake in Fawry, a deal that valued the company at EGP773 million (US$100 million) and saw the company adopting an expansion strategy outside of Egypt. The investors are the Egyptian-American Enterprise Fund (EAEF), pan-African private investment firm Helios Investment Partners, and the International Finance Corporation.

* $1 = 16.5600 Egyptian pounds

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Airtel Africa Initiates IPO On The London Stock Exchange, Public Trading Still July 4

June 29, 2019

Airtel Africa has had its Initial Public Offering ( IPO ) in both London and Nigeria, but the real IPO, in which the general public may be able to buy Airtel’s shares begins from the 4th of July, 2019. Right now, it appears, Airtel Africa is selling to investors below what they were initially priced, on the London Stock Exchange.

Airtel’s stocks on the London Stock Exchange fell as much as 15 percent to 68p after Africa’s second-largest mobile operator listed on the London Stock Exchange, knocking £500m off its opening valuation to give it a market capitalization of around £2.6bn.

Here Are The Facts

The IPO is for institutional investors and high net worth individuals only
The general public may be able to deal in Airtel’s shares by July 4.
For the IPO, Airtel is backed by SoftBank an issuing house and had priced its initial offering at 80p per share, but this poor IPO in London saw the company perform below what it secured in two recent private funding rounds.
The African subsidiary of Indian telecoms giant Bharti Airtel had priced its shares at 80p, at the bottom of its previously announced 80–100p price range.
This means that its current valuation now stands at around £3.1bn (NGN 1.4 trillion or $3.9 billion). This is already significantly below the valuations implied by earlier funding rounds.
Airtel Africa secured $1.25bn from a consortium of investors including private equity house Warburg Pincus, Singapore’s Temasek, SoftBank and Singapore Telecommunications at a valuation of around $4.4bn, in October last year.
A $200m investment by the Qatar Investment Authority earlier this year put its valuation closer to $5bn.
From the combined Nigerian and London IPO, Airtel Africa — which operates a telecoms and mobile money business across 14 African countries — raised £595m.
The whole of the shares issued in the IPO represented 19 percent of Airtel’s total stock.

“This is a proud moment for the team that has built Airtel Africa into the second-largest mobile operator in Africa. We are now the first telecom company to simultaneously list on the Premium segment of the London Stock Exchange and Nigerian Stock Exchange through an IPO.”

Airtel’s IPO is For Institutional Investors. Ordinary Nigerians and the General Public Can Begin To Trade In Airtel’s Shares By July 4 On Both The London And The Nigerian Stock Exchanges

“The offer consists of an institutional offer only. Ordinary Shares will be offered pursuant to the Global Offer (a) to certain institutional investors in the United Kingdom and elsewhere outside the United States in reliance on Regulation S, (b) in the United States only to those reasonably believed to be Qualified Institutional Buyers, QIBs in reliance on an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and pursuant to the Nigerian Offer © in Nigeria to Qualified Institutional Investors and High Net Worth Investors as defined in Rule 321 of the Nigerian Securities and Exchange Commission, SEC Rules pursuant to a book building process (the “Nigerian Offer”)” the prospectus stated.

Why The Nigerian Stock Exchange and Not The Johannesburg Stock Exchange, Which Is The Largest In Africa, Was Chosen For The African Listing

According to the prospectus of the offer, Nigeria represents the Airtel’s largest single country subscriber base, comprising 37.6 percent of the Group’s total subscribers as at 31 March 2019, with 43.4 percent of subscribers in East Africa and the remaining 19.1 percent in the Group’s Rest of Africa segment.

In the year ended 31st March 2019, revenue in Nigeria was $1.1 billion (representing 35.9 percent of the Group’s revenue in the year) and the underlying Earnings Before Interest Tax Depreciation and Amortisation, EBITDA was $550 million.

In Nigeria, revenue attributable to mobile voice services in the year ended 31st March 2019 was $739.8 million

The prospectus said the company wants to raise money so it can use it to pay down some of its crushing debts.

Why Airtel’s Shares Are Worthy Of Public Subscription

Airtel reported revenues of $3 billion for the year ended March 2019 compared to $2.9 billion the year before.

The company also reported a profit of $450 million in 2019.

Airtel posted losses of $134 million and $769 million in 2016 and 2017 respectively.

Timelines For The Offer

The offer closes June 28 and allotment of new ordinary shares to the shareholders begins June 29, 2019, while the crediting of ordinary shares to accounts start July 3, 2019.

The Nigerian admission and start of unconditional dealings on the Nigerian Stock Exchange, NSE is expected from July 4, 2019

Click here to download and read Airtel Africa ’s IPO prospectus.

Here is a list of stock brokerage firms in Nigeria through which you may be able to purchase or sell shares on the Nigerian Stock Exchange.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Uber’s First IPO Promises Each Driver $40,000 Worldwide

April 26, 2019

Uber IPO is going to happen soon but the company has posed a loss of over $1 billion in the first three months of 2019 alone. However, one group of people who are going to benefit the most are the ride-hailing company’s drivers. Uber said each driver could get up to $40,000 each as a “driver appreciation reward” ahead of the company’s initial public offering. With its first IPO due earlier in May, the ride-hailing company is aiming for a valuation of $91.5 billion. If this becomes successful, Uber would become among the top ten US company with the largest U.S. listing in years. Plus: this is also a test of investor appetite for a high-growth but highly unprofitable business.

Here is How Everything Is Going To Play Out

To qualify for the reward, drivers must have completed at least 2,500 trips, including one this year, as of April 7, and have an account in good standing. Uber said payouts to non-US drivers would be adjusted to reflect different average hourly earnings across regions.
For US drivers, Uber said eligible US drivers would receive one of six cash rewards based on the number of Uber trips they’ve completed: $100 for making at least 2,500 trips, $500 for at least 5,000 trips, $1,000 for at least 10,000 trips, $10,000 for at least 20,000 trips, $20,000 for at least 30,000 trips, and the largest, $40,000, for at least 40,000 trips.
About $300 million has been budgeted by the company for more than 1.1 million drivers worldwide for payment on or around Saturday
In a regulatory filing on April 26, 2019, Uber is going to sell every share on its first day of trading at a price range of $44 to $50. This is not a big deal anyway.
The company will sell 180 million shares in the offering to raise up to $9 billion.
Existing shareholders in Uber, holding over 27 million are ready to raise as much as $1.35 billion from those shares. This is going to make them instant multimillionaires if this happens.
Of the stock being sold in the IPO by existing Uber investors, 6.86 million shares are from Uber co-founders Travis Kalanick and Garrett Camp, meaning the two men could jointly pocket $343 million if the IPO prices at the top end of its current range.
Already, PayPal, an American online payment solution, is making the first move by agreeing to purchase $500 million of stock in a private placement at the price the IPO eventually settles at.
Uber management is gearing up for what is going to be the hardest and the most stressful roadshow ever, as they would begin a difficult task of pitching Uber to public markets investors.
Uber expects to price the IPO on May 9 and then begin trading on the New York Stock Exchange the following day, people familiar with the matter have said.
A valuation of $91.5 billion is already a handwriting on the wall. In 2018, Uber’s underwriters or investment bankers told Uber they would raise $120 billion when the IPO is ready to go, but then, this sudden adjustment in the valuation brings the company closer to the $76 billion valuation it attained in its last private fundraising round in 2018.
This adjustment of valuation expectations reflects the poor stock performance of its smaller rival Lyft Inc following its IPO last month. Lyft shares ended trading on Thursday down more than 20 percent from their IPO price amid investor skepticism over its path to profitability. The most probable guess, of course, why Uber’s IPO would be more successful would be that Uber has more market share than Lyft, and would definitely perform better than Lyft.
Uber’s projected $91.5 billion market capitalization would make it bigger than General Motors (GM), Ford (F), Fiat Chrysler (FCAU), Tesla (TSLA), Honda(HMC), Volkswagen (VOW.Germany), Continental (CON.Germany), the entire U.S. rental car industry, and most of the aftermarket car-parts business. Only Toyota (TM), with a market capitalization of $200 billion, is larger.

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When the road show begins, Uber expects to find a lot of answers to provide to questions posed by potential investors. Such questions would include:

When will Uber ever make profit? This question is going to be quite depressing for the company. The company reported in the filing, a net loss attributable to the company for the first quarter of 2019 of around $1 billion on sales of roughly $3 billion.
How will Uber navigate the gradual movement to self-driving vehicles; would Uber’s business model support higher driver costs from minimum wage rules?
How will Uber handle sexual harassment allegations, a massive data breach that was concealed from regulators, use of illicit software to evade authorities and allegations of bribery overseas, going forward?

“When it comes to Uber, we believe there are still questions over the current car-sharing model, the economics of which are not immediately or obviously attractive for sustainable, long-term investment,” Mark Hargraves, head of Framlington Global Equities, wrote in a note.

Charles Rapulu Udoh

Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.

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