Airtel Africa has purchased 8.6 million of its ordinary shares back from Citigroup Global Markets Limited as part of a share buyback plan that began on 1 March 2024.
According to the second largest mobile network operator, the objective for this move is to reduce the share capital, which directly reduces the debt obligations of the company. Airtel developed this strategy to enable efficiency in operations, as the company is facing a rising cost of operation.
“The board believes that repurchasing its shares is an attractive use of its capital in light of the group’s strong long-term growth outlook,” said Segun Ogunsanya, CEO of Airtel Africa.
According to Ogunsanya, Airtel’s businesses have generated significant cash to cover the share buy-back program launched by the board.
The Airtel buy-back program was launched on March 1, 2024, to repurchase $100 million worth of the network operator’s shares in 12 months.
The program divides into two stages, with the first stage having a budget of $50 million and lasting 7 months until August 2024. The last transaction recorded by the program involves the repurchase of 487,985 ordinary shares at the price of $131.70 per share.
Currently, the mobile network giant has been struggling to remain profitable, which is a result of the macroeconomic issues currently happening in Nigeria.
The situation is noticeable in the company’s financial report as it shows a revenue drop of 21.96% to $1.24 billion in December 2023, from $1.59 billion recorded the previous year. This is because of the rapid devaluation of the Naira that directly affected Airtel’s conversion rates.