Airtel Africa has revealed that it is starting the second phase of its stock repurchase program, which amounts to $50 million. This is a way to decrease share capital, debt commitments, and operating cash costs linked to an overabundance of share capital.
On February 1, 2024, and March 1, 2024, the telecommunications giant laid out plans for the repurchase, indicating that 34,896,112 ordinary shares in total will be bought from Citigroup Global Markets at a volume-weighted average price of 110.35p, spread out over 12 months.
The second round of share buyback is expected to end before December 19, 2024, and will not exceed a maximum amount of $50 million. In order to facilitate this repurchase, Airtel Africa is buying its ordinary shares from Citigroup Global Market Limited (Citi), which will function as a riskless principal, making decisions on its own accord, unrelated to the firm.
The repurchase aims to reduce not only share capital but also debt obligations and operational cash costs that excess share capital might incur. Additionally, the company will work with Citi to purchase the second tranche of shares, complying with pre-set conditions to align with shareholder authority granted for buying ordinary shares.
Airtel Africa registered a pre-tax profit growth of 133.6% YoY, amounting to $74 million, during Q2 2024, despite a 16.1% revenue decrease to $1.15 billion. Furthermore, operating profits declined by 27.4% to $335 million, while earnings per share from common stocks increased by 103%.
CEO Sunil Talder stated that the company intends to improve customer experience, simplify client paths, and increase operational effectiveness.
This share buyback program indicates Airtel Africa’s commitment to adjusting its capital structure and delivering returns to its investors.
