NSE suspends Airtel Africa listing as firm fails to meet requirements
The Nigerian Stock Exchange (NSE) has postponed the planned cross border secondary listing of 3,758,151,504 ordinary shares of Airtel Africa.
The Exchange, in a mail, said that the postponement was necessitated by the need to ensure that the company met all the post NSE approval pre-requisites for listing on NSE.
“NSE will provide further communication on this issue when all the conditions for the listing in its market have been met,” NSE said.
Airtel Africa listing was earlier scheduled to hold on July 5, with the listing of 3.76bn shares at N363 per share.
It was also gathered that the company has not completed documentation with the Securities and Exchange Commission (SEC) for the commission to approve its application for listing.
A source close to the transaction said that the company “has not completed its documentation.”
“They are still running helter-skelter to complete their documentation. Until that is done, the SEC cannot approve. So, the ball is in their court,” the source said.
On June 18, Airtel Africa officially filed an application with the SEC for listing of its shares on the NSE.
Speaking in an interactive session with journalists in Lagos at the weekend, the Head, Listing Regulation, NSE, Godstime Iwenekhai, said after Airtel’s book building, about 130 shareholders subscribed to issue, which is below the 300 stipulated by the Exchange.
The number of shareholders requirement was not the only provision the telco fell short off, as Airtel got approval for a free float of 25 per cent across the London Stock Exchange (LSE), and the NSE, which is also above the Exchange’s requirement of 10 per cent for cross-border listing.
Free float refers to the portion of shares of a company that are in the hands of public investors, as opposed to locked-in stock held by promoters, controlling-interest investors, or governments.
However, Iwenekhai explained that, “The Exchange cross-border listing requirements rule also grants the Exchange the powers to give exemption or waivers in every part of the rule, because the rule is developed in such a way to attract cross-border listing to the exchange.
“We have the requirements that we feel we can deploy to attract such big and foreign companies to Nigeria; the rule as approved by the SEC gives the Exchange the power to grant such requirement,” which enabled the management grant Airtel the waivers having met other stringent requirements in foreign listing.
“So, if you have a company that wants to list in NYSE, LSE, GSE, that are all members of WSA, we will know that they are also going to meet with the standards, having complied with the stringent listing requirements in the foreign destinations.”
However, he noted that the security of Airtel would be marked as Below Listing Standard (BLS), because they could not meet the requirement presently. “It is not a waiver that would last in perpetuity, waiver is granted for them to list at this level. By the time retail investors begin to come in, we expect the number of shareholders to increase, and they will eventually meet the shareholders requirement, and once that is done, we remove the BLS mark to shadow that they have fully meet with all the requirements of the exchange.
Nevertheless, the Airtel pre-listing did not change the market fortunes, as transactions on the trading floor sustained continued on a sliding profile, as more bellwether stocks suffered price depreciation, causing the All-share index to slump further by 0.3 per cent.