Bharti Overseas Boosts Stake: Now Commands 12.58% Voting Rights in Airtel Africa

Infostride News reports that Bharti Overseas Private Limited has boosted its voting rights in Airtel Africa to 12.58%, following a substantial investment by its subsidiary, Indian Continent Investment Limited. The acquisition involved 53.5 million Airtel Africa shares, totaling £57.2 million, and was executed on the London Stock Exchange, as disclosed in a corporate filing on the NGX website.

The driving force behind Indian Continent Investment Limited is closely associated with Shravin Bharti Mittal, the son of Sunil Bharti Mittal, founder of Bharti Enterprises, the ultimate controlling entity of Airtel Africa. Bharti Overseas Private Limited, which commands a 100% voting right in Bharti Global Limited, is the entity through which these voting rights in Airtel Africa are exercised. Bharti Global Limited, in turn, holds a 100% voting right in Indian Continent Investment Limited.

This arrangement results in Bharti Overseas Private Limited’s indirect shareholding, with Bharti Global Limited holding 3.38% voting rights and Indian Continent Investment Limited holding 9.20% voting rights, summing up to the current 12.58%. This represents an increase from the previous voting right of 11.03% held by Bharti Overseas Pvt Ltd.

In tandem with this development, Singapore Telecommunications Limited, a significant shareholder, has witnessed a reduction in its voting rights. The reduction brings its stake from 3.9406% to below 3%. Singtel is notably the largest mobile network operator in Singapore.

In terms of overall ownership structure, Bharti Airtel Limited, jointly controlled by the Mittal Family and Singtel, holds the lion’s share with a 56% stake in Airtel Africa. Following closely is Bharti Overseas Pvt Limited, another venture associated with the Mittal family, now commanding a 12.58% stake. Approximately 25% of Airtel Africa’s shares are freely traded on the London Stock Exchange and the Nigerian Stock Exchange (NGX).

Examining the financial performance of Airtel Africa for the first half of FY 2024 reveals a turbulent period, marked by a pre-tax loss of $13 million. This represents a staggering year-on-year decline of 103.8% from the corresponding period in FY 2023. The primary factor contributing to this loss is the significant foreign exchange losses incurred due to currency devaluation, particularly in Nigeria.

Segun Olusanya, the Group CEO, shed light on the half-year results, stating, “As reported in July 2023, our results for the first quarter were significantly impacted by the changes to the FX market in Nigeria, introduced by the Central Bank. While the changes are required for the long-term benefit of the Nigerian economy, the immediate impact of the naira devaluation continues to weigh on our reported financial performance in the period.”

In summary, the recent developments in Airtel Africa’s ownership structure and the financial challenges faced in the first half of FY 2024 underscore the dynamic nature of the telecommunications industry, influenced by both market forces and regulatory changes. Investors and industry observers will keenly watch how Airtel Africa navigates these challenges and positions itself for future growth in the evolving landscape of the African telecommunications market.