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NSE explains why Airtel Africa is going ahead with IPO despite failing listing requirement

@nsenigeria has addressed the reason Airtel Africa, parent company of @AirtelNigeria was issued a waiver despite not meeting the shareholders’ requirement needed to list for an Initial Public Offering (IPO) on Nigeria’s bourse. The listing holds July 5, 2019.

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The Nigerian Stock Exchange (NSE) has explained the reason why Airtel Africa was issued a waiver despite not meeting the shareholders’ requirement needed to list for an Initial Public Offering (IPO) on Nigeria’s bourse. The listing holds July 5, 2019.

Airtel Africa had announced plans to list its shares on the stock exchange, but the company couldn’t gather the needed 300 shareholders mandatory for any company looking to list on NSE. Airtel was only able to pull 130 shareholders. This prompted the NSE to waive the requirement for the company.

[READ ALSO: Airtel Africa has announced its listing price on the NSE]

While addressing issues relating to the waiver at a pre-listing media briefing which Nairametrics was part of earlier today, NSE said it had to grant the waiver due to the peculiarities surrounding the offer. Airtel’s is targetting high net worth individuals and institutional investors.

Airtel had previously listed on the London Stock Exchange (LSE), closing its first day of trading in disappointment. The listing exercise was one of the worst debuts of stocks in the international market this year, as the company’s share price slumped steeply by 16% on its first day of trading despite offering shares below its valuation.

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NSE addresses its waiver to Airtel Africa listing, Airtel Africa fails to meet shareholders' requirement, Nigerian Stock Exchange

Airtel Africa’s parent company, Bharti Airtel

The reason why Airtel Africa failed to meet shareholders’ requirement was linked to the company’s route to market, which at this initial stage will focus on the following investors.

  • Qualified institutional investors
  • High-end individuals

During the media chat, NSE said Airtel Africa had met the free-floating requirement for cross-border secondary listing which was rated at 10%, with the network operator accounting for 25%. But despite waiving Airtel Africa to list, NSE described the IPO as below listing standard (BLS).

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[READ ALSO: Why Airtel’s IPO is not for you]

Why NSE gave Airtel the all-clear: NSE says its rule gives the stock exchange regulators the power to waive such requirement for a company that has the ability to meet up with the numbers in a certain period. The Exchange believes Airtel’s inability to meet listing requirement is not a significant risk and will eventually meet up “in the nearest future”.

Airtel required about 300 shareholders to meet minimum listing requirements.

NSE addresses its waiver to Airtel Africa listing, Airtel Africa fails to meet shareholders' requirement, Nigerian Stock Exchange

Raghunath Mandava, CEO Airtel Africa

However, the NSE disclosed that companies which do not eventually meet this requirement will be classified ‘below listing standard and a CSI code’ which is like the ‘buyer beware mark’.

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NSE doesn’t have total control on Airtel: When the telecommunications company finally list Monday, it will not be subjected to total regulatory rules of the NSE because it has been listed on the London Stock Exchange.

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[READ ALSO: Airtel, Telkom consolidate to battle Kenya’s largest telecoms company]

Meanwhile, Airtel Africa chose to list in Nigeria ahead of 13 other countries, including South Africa. The company had been weighing options between the Johannesburg Stock Exchange and NSE when it decided to go public, but the Bharti Airtel subsidiary settled for Nigeria.

What you need to know: Airtel’s IPO is a Cross border secondary listing because the company has initially listed on another bourse which is the LSE. Airtel Africa will be listed on the main board but eyeing the Premium Board of the NSE.

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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Hospitality & Travel

US imposes $15,000 visa bond on 15 African countries, others

The US has issued a visa rule requiring tourist and business travelers in some countries to pay a bond of up to $15,000 in addition to the visa fees.

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The outgoing administration of US President, Donald Trump, on Monday, November 23, 2020, issued a new temporary visa rule that requires tourist and business travelers from 15 African countries and others to pay a bond of up to $15,000 in addition to the visa fees, which ranges from $16 to $300, in order to visit the United States.

According to TheCable, the US State Department said the visa bond pilot programme, expected to take effect from December 24 and end on June 24, 2021, is targeted at countries whose citizens have higher rates of overstaying B-2 visas for tourists and B-1 visas for business travelers.

The Trump administration said the six-month pilot program aims to test the feasibility of collecting such bonds and will serve as a diplomatic deterrence to overstaying the visas. Hence, overstay places significant pressure on Department of Justice and Department of Homeland Security.

The visa bond rule will permit U.S. consular officers to request tourist and business travelers from countries whose nationals had an overstay rate of 10% and above in 2019 to pay a refundable bond of $5,000, $10,000, or $15,000.

The countries whose tourist and business travelers fall into this category and subjected to the bond requirements are 24 countries, including 15 African countries. While these nations had higher rates of overstays, they sent relatively fewer travelers to the United States.

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The countries include Afghanistan, Angola, Bhutan, Burkina Faso, Burma, Burundi, Cape Verde, Chad, the Democratic Republic of the Congo (Kinshasa), Djibouti, Eritrea, the Gambia, Guinea-Bissau, Iran, Laos, Liberia, Libya, Mauritania, Papua New Guinea, Sao Tome and Principe, Sudan, Syria, and Yemen,

Nigerian travelers escaped paying the temporary visa rule, as their overall score was below the threshold of 10% and above overstaying rate.

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Economy & Politics

Senate approves issuance of N148bn promissory notes to Bayelsa, 4 others

Promissory notes worth N148,141,969,161.24 has been approved by the Senate as refund to Bayelsa, Cross River, Ondo, Osun and Rivers States

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Senate approves issuance of promissory notes worth N148 billion as a refund to five states

Promissory notes worth N148.141billion have been approved by the Senate as a refund to Bayelsa, Cross River, Ondo, Osun, and Rivers States for projects executed on behalf of the Federal Government.

The approval which was given by the Senate at the plenary on Tuesday, 24th November 2020, came after the presentation of a report by the Committee on Local and Foreign Debts, led by Senator Ordia Clifford (PDP-Edo).

According to a news report by NAN, this is a go-ahead to the Federal Government, who had sought the approval of the Senate for issuance of promissory notes for a refund on federal projects executed by State governments.

The request was contained in a letter addressed to President of Senate, Dr. Ahmad Lawan by President Muhammadu Buhari, and read at plenary. The Senate referred the matter to the Committee on Local and Foreign Debts for further legislative input.

(READ MORE: FG inaugurates steering committee on Covid-19 economic recovery)

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Senator Ordia Clifford, while presenting the report of the committee, said the Permanent Secretary, Federal Ministry of Finance; Federal Commissioners of Finance and Works in the five states, had briefed the committee on details of the projects.

He said the Committee was presented with documents relating to the approvals of the Federal Government through the Federal Ministry of Works and Housing for the execution of the projects and certificates of completion, amongst other documents.

At the plenary today, Senator Ordia moved the motion that the Senate approves the Committee’s recommendations by approving the issuance of the promissory notes to the State governments.

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According to him, the amount due to the five states is N148.14billion.

  • Bayelsa was allotted N38.40billion
  • Cross River was allotted N18.39billion
  • Ondo was allotted N7.82billion
  • Osun was allotted N4.57billion
  • Rivers was allotted N78.95billion

What they are saying

The President of the Senate, Ahmad Lawan, disclosed that records showed PDP states had the highest refund, he said: “If you look at the list of states, only two are APC states and they have the least in terms of refund, this is fantastic and a mark of leadership by the Federal Government. This shows tolerance and leadership by this administration.”

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Business News

Interswitch Group becomes Finastra’s lead technology partner in Nigeria

nterswitch Group has unveiled a consolidated partnership with Finastra, one of the world’s most influential Fintechs.

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Interswitch Group becomes Finastra’s Lead technology partner in Nigeria

In a bid to further develop its market and expand, Interswitch Group has unveiled a consolidated partnership with Finastra, one of the world’s most influential Fintechs.

This is according to a verified post by Interswitch Group on Linkedin, as seen by Nairametrics.

What this means

The strategic partnership enables Interswitch to become Finastra’s lead technology partner and will avail the latter the opportunity to bring the broadest set of financial software solutions to financial institutions in Nigeria and across Africa, in conjunction with Interswitch’s strong understanding of the local banking and payments landscape, as well as the ability to deploy solutions across these markets.

Some of Finastra’s financial software solutions that will be incorporated into Interswitch’s digital solution include: Fusion Kondor and Fusion Trade Innovation, which will consolidate Interswitch’s position as a hub for financial solutions, including treasury and trade solutions.

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(READ MORE: 5 Nigerian startups selected to join 7 others at the Africa Tech Summit Connects (ATS))

What they are saying

Commenting on the partnership, the Founder and Group Chief Executive Officer of Interswitch, Mitchell Elegbe, was quoted by Tech economy saying:Our partnership with Finastra is consistent with our strategic growth plan and we both share the vision of deepening access to financial services by providing world-class technology and innovative solutions.

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“The partnership enables Finastra to seamlessly deploy its technology in this market. For Interswitch, we will be leveraging our proven success and expertise in delivering transaction banking solutions to support Finastra in localizing and implementing their technology in this region.’’

On the other hand, the Head of Partner Ecosystem MEA & CIS at Finastra, Hamid Nirouzad, said: “Interswitch has a proven track record of delivering solutions to commercial banks, as well as, a strong understanding of the local banking landscape across Nigeria and sub-Saharan Africa.

“Finastra is committed to providing its solutions to financial institutions across the world, and partnerships such as this will result in successful projects, with rapid delivery at a reasonable cost.”

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