Investors update: Airtel Uganda seeks $200m in IPO

Airtel Uganda seeks over $200m in IPO

Highlights

• Airtel Uganda aims to raise 800 billion Ugandan shillings ($216 million) by selling a 20% stake to drive its expansion plans, per the firm’s initial public offering (IPO) plan.
• When the listing is completed, Airtel will be the second listed telecoms operator on Uganda’s stock exchange after MTN Uganda, majority-owned by South Africa’s MTN Group, which was listed in December 2021.
• The company expects to pay dividends of 500 billion Ugandan shillings in 2023 and will target a dividend payout ratio of 95% of retained earnings or net profit after tax, whichever is higher.

Source: CNBC

Our Takeaway

In 2019, Uganda directed telcos to list at least 20% of their shares on the local bourse within two years, putting pressure on multinationals such as MTN, Airtel, and Lycamobile. MTN went public in 2021 through an IPO that attracted local and regional investors. While these developments encourage local ownership in some of the country’s most profitable companies and deepen the capital market, perhaps the most exciting bit is the prospect of Ugandans buying Airtel shares via mobile money—showing just how far mobile phones have revolutionized Africa.

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BOV launches $20m fund for African startups

Highlights

• Black Ostrich Ventures, a Los Angeles-based venture capital firm, has launched a $20 million pre-seed and seed stage fund to support African founders to grow their businesses. 
• A statement issued by the newly created firm says it will support startups with check sizes ranging from $50,000 to $200,000 in the cleantech, supply chain, ag-tech, and edtech sectors.
• The fund—backed by LPs in New York and undisclosed high-net-worth individuals in Los Angeles—will focus on startups in Tanzania, Zambia, Morocco, and Uganda.

Source: TechCabal

Our Takeaway

While there’s been a string of new $10-$50 million startup funds targeting Africa over the past few years, what makes Black Ostrich’s fund unique is its country and sector focus. The firm holds that VC capital inflows into Africa go to the Big Four countries—Nigeria, South Africa, Egypt, and Kenya—but most exits do not happen in these markets. A Briter Bridges report also finds that fintech, Africa’s top sector by deal value and volume since 2015, accounts for less than a third of exits on the continent. These imply investment opportunities lie elsewhere for investors, which BOV is looking to capture. 

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Gabon soldiers seize power in Africa’s latest coup

Highlights

• Soldiers seized power in OPEC member Gabon, four days after the central African nation held disputed presidential elections. The nation’s dollar bonds sank.
• If the putsch holds in the former French colony, it would mark the ninth in sub-Saharan Africa in the past three years and follows a coup in Niger last month. 
• The military takeovers have been rooted in the economic malaise and weak governance that have fed frustration among civilians and — in West Africa in particular — the spread of extremist violence.

Source: Bloomberg

Our Takeaway

Across Africa, coups in Mali, Guinea, Burkina Faso, Chad, and Niger have undermined democratic progress in recent years. Last month, the military snatched power in Niger, sending shockwaves across the Sahel and sucking in global powers with strategic interests at stake. Tensions were running high in Gabon amid fears of unrest after Saturday’s presidential, parliamentary, and legislative vote, which saw Bongo seeking to extend his family’s 56-year grip on power while the opposition pushed for change in the oil and cocoa-rich but poverty-stricken nation.