Airtel Africa Plc has begun its share buyback program, as indicated following its prior declaration on February 1, 2024, following the release of its nine-month earnings through December 31, 2023.
This information was disclosed in the company’s notice to the Nigerian Exchange Limited (NGX) and the investing public.
The announcement, signed by Alastair Jones of Airtel Africa Investor Relations, states that the share buyback program will begin today. It plans to repay up to $100 million to stockholders over a 12-month period.
The share buyback program is planned to be implemented in two tranches, with the first beginning today and ending on or before August 31, 2024.
According to the telecom firm, the first tranche will be up to $50 million, and the Company has entered into an agreement with Citigroup Global Markets Limited (“Citi”) to conduct the first tranche of the buy-back and carry out on-market purchases of its ordinary shares, with the Company later purchasing its ordinary shares from Citi.
Under this agreement, Citi will function as a riskless principal, making decisions independent of the Company. It was underlined that the main goal of the buyback exercise is to reduce the Company’s capital.
As a result, all shares purchased during the buyback scheme will be cancelled.
The company in its statement stated that the buyback program reflects the tremendous work made in previous years to decrease leverage and strengthen the company’s balance sheet.
It further reiterated that with the cash accretion at the holding company level, current leverage, and consistent strong operating cash generation, the Company is well positioned to undertake this share buyback to enhance shareholder returns, which is consistent with its existing capital allocation policy.
According to the company, the acquisitions of ordinary shares under the buy-back program will be made in accordance with the pre-set criteria defined in the agreement with Citi, as well as the Company’s general authorization to acquire ordinary shares granted by shareholders.
This authorization was granted during the annual general meeting of July 4, 2023, when shareholders approved the purchase of up to 375,815,150 ordinary shares.
The buy-back program will also follow the framework outlined in Chapter 12 of the Financial Conduct Authority’s Listing Rules and the provisions of the Market Abuse Regulation (EU) No 596/2014, as incorporated into domestic law by the European Union (Withdrawal) Act 2018, as amended.
Furthermore, purchases may continue throughout the Company’s closing hours during the engagement.
However, it is specifically stated that no repurchases will occur on the Nigerian Stock Exchange. In due time, the Company plans to enter into arrangements to begin a second tranche of the share buy-back programme totaling up to $50 million.
