Four hours before the closure of the Airtel’s initial public offering, as the telco struggled to get investors or make a third extension to hit the target of selling at least 20 percent of the floated stock, National Social Security Fund (NSSF) Uganda bought over 50 percent of the eight billion shares.
In a joint statement issued by the NSSF Managing Director Patrick Ayota and Airtel Uganda CEO Manoj Murali on Friday afternoon, Uganda’s biggest pension scheme has invested $52.7 million (Ush199 billion) for 10.55 percent of the 20 percent stock on offer.
Initially, reports had indicated that NSSF was not keen on investing in the telco for fear of burning its fingers. But the last-minute purchase saved the day.
The USE listing rules require that any company offering shares to sell at least 20 percent of the offer or seek approval from the regulator to extend the offer period.
Airtel was allowed an extension after registering lukewarm response from the market.
The investor appetite remained low until NSSF came on to the scene.
Still, high net-worth individuals and institutional investors are gaining more in the IPO after the telco offered bonus shares, in an effort to attract more share uptake.
According to the offer, an investor who buys less than 37 million shares will get 20 extra shares for every 100 shares, while purchases above 2,850 million shares got 112 bonus shares for every 100 bought. This means that institutional investors who buy in bulk get more bonus shares, hence spending about Ush47 ($0.012) per share instead of Ush100 ($0.026), the price of the offer.
The structure was announced by Mr Murali on October 25.
With fewer subscriptions at the end of the first deadline, on October 13, and with lacklustre response during the additional two weeks, the telco modified the terms to attract more investors or give more shares for bulk buyers.
The telco seeks to raise Ush800 billion ($211.7 million), according to the company’s IPO prospectus.
Persistent economic worries, weak returns from listed shares and fairly high-interest rates on government securities have scared off several institutional investors from the Uganda Securities Exchange (USE) despite remarkable half-year results published by listed companies since last month.
