Kenya: Airtel has announced that it is ready for its IPO
June 26th 2023
Companies wishing to evolve in the Kenyan ICT sector are obliged to sell 30% of their capital to local investors. On the Kenyan telecom market, Airtel is the only operator not to comply with this rule.
The telecom group Airtel Africa is ready to list its Kenyan subsidiary on the Nairobi Stock Exchange (NSE) to comply with the regulations in force. This was revealed by Segun Ogunsanya, CEO of the group, during recent discussions with the regulator for the deployment of 5G and the extension of the telecom network of Airtel Kenya.
“ As part of our licensing requirement, we need to be listed on the stock exchange in Kenya. Over the past two months, discussions have taken place as to whether this condition will be changed or whether it will be maintained. We are still waiting for Kenya to tell us clearly if there is still a listing obligation ,” Mr Ogunsanya said.
The Kenyan government, through the Information and Communication Technology Sector Policy 2020, introduced a rule stating that only companies with at least 30% Kenyan ownership would be allowed to provide ICT services in the country.
Airtel which benefits from an indefinite exemption granted in 2013 will have to meet the local participation threshold within three years from the date of the notice (March 25, 2021). Last February, the company announced that it was talking with the regulator to determine the best way forward to secure local participation in the sector. It has the choice between an IPO and the direct sale of at least 30% of its capital to a Kenyan investor.
Last April, President William Ruto announced his government planned to repeal the turnout rule at a regional trade summit in Nairobi targeting US investors. While the initiative is expected to facilitate foreign investment in Kenya’s ICT sector, no official decision has been made so far.
“ We are working on ways to comply with all legal requirements of our license. So if we are forced to go public, we will. But again, the Kenyan authorities indicated that this may not be a requirement. But whatever the requirement, we will meet it ,” Mr. Ogunsanya added.
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