Going public in an initial public offering (IPO) is a milestone for most private companies. Yet, different companies go public for different reasons. Small ones are usually looking to further their growth by using an IPO as a way to generate the capital.
Another reason is to monetize the shareholders — including employees and investors or backers. Because a private company's valuation is usually paper money until a liquidity event.
Though, the main reason most decide to go public is to raise money - a lot - and spread the risk of ownership among a large group of shareholders. Spreading the risk of ownership is especially important when a company grows. With the original shareholders wanting to cash in some of their profits while still retaining a percentage of the company.
Last year, the African continent saw a couple of IPOs. Some included Cassava SmartTech (Zimbabwe), Vivo Energy (secondary listing on JSE), Bank of Kigali (cross-listing on NSE), Cipla QCL (Uganda), MTN Ghana and more. Yet, while those were got listed, others were rumoured to be on the verge and are likely to list in 2019. We bring you the list we think is most likely to.
In September last year, Naspers announced its plans to separately list and unbundle its Video Entertainment business as MultiChoice Group on the Johannesburg Stock Exchange (JSE). They cited creating "an empowered, standalone Africa-wide entertainment business" as the key reason. They also pointed out unlocking value for Naspers shareholders.
Naspers will retain its primary listing on the JSE as well as its interests in Media24. MultiChoice Group is anticipated to list on the JSE and simultaneously unbundle in the first half of 2019. Though that is still subject to the approval of the requisite regulatory authorities.
2. MTN (Nigeria, Uganda, Rwanda)
As of 30 June 2016, MTN Group recorded 232,6 million subscribers across its operations in Africa, Europe and Asia. This made it the eleventh largest mobile network operator in the world and the largest in Africa. But, being the biggest operator seems to be coming with pressure to list from regulators. Last year, there were rumors that different subsidiaries of the telecom group would list on their domestic exchanges. Though the company denied having any pressure from the regulators.
Yet, as MTN marked 20 years of operation in Uganda, its licence also expired. As a condition for renewal, the regulator-mandated them to list on USE. It is not clear when but it highly anticipated that they will fast-track it in 2019.
In Rwanda, MTN was mulling a sale of shares to help raise funds for its network expansion. At the same time, it was also seeking funding from lenders. It finally raised a RWF50 billion (USD56.4 million) loan from a consortium of eight banks towards the end of 2018. Perhaps this might ease their pressure on the listing.
MTN Nigeria was among the most troubled African corporates in 2018 - up there with the likes of KPMG South Africa and Steinhoff South Africa. The company was entangled in an $8 billion illegal profit dispute with Nigeria's Central bank, CBN. However, they later settled it in December for $53 million. As this was going on, the telecom giant mulled scraping their IPO. But, since the dispute is over, perhaps they might reconsider it in 2019.
3. Dangote Cement
Last year, Dangote Cement was considering a London share sale over the next two years. In October, Chief Financial Officer Brian Egan told investors on a conference call, after reporting first-quarter financials, that Nigeria’s biggest company, owned by the continent’s richest man, Aliko Dangote, would also seek to raise $500 million via the issue of a Eurobond. That’s on top of a 300 billion naira ($833 million) local-currency bond they had announced a month earlier.
In April, Lagos-based Dangote Cement hired former Xstrata Plc CEO Mick Davis as a non-executive director. That was alongside Cherie Blair, a lawyer and the wife of ex-U.K. Prime Minister Tony Blair. The high-profile appointments were widely seen as a prelude to a listing in London. After the cement maker before mulled a share sale in the U.K. capital in 2010.
4. Liquid Telecom
Last year, according to Bloomberg, Econet Wireless Zimbabwe was in talks about restructuring. The talks were related to a reorganization and it was likely that it regarded plans for an IPO by Liquid Telecom. A unit of Econet that owns about 40,000 kilometres (25,000 miles) of cross-border fibre networks in Africa.
Yet, it is also possible that the restructuring was about Cassava SmartTech - which listed in December. Nonetheless, Liquid Chief Executive Officer Nic Rudnick said in 2017 that an IPO for the company was a possibility.
5. Helios Towers
In March 2018, Helios Towers ditched its plans to launch an IPO in London. The listing was expected to value the business at about $2.8 billion. Helios said it had received “considerable interest” from institutional investors who were supportive of its business plan and growth prospects but its shareholders had decided to withdraw the planned listing.
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The company is owned by telecom firms Millicom and Bharti Airtel. As well as hedge funds including Albright Capital Management and Soros Fund Management, which owns more than 20%.
6. Eaton Towers
Eaton Towers was the second African operator of mobile-phone towers to halt planning for a share sale in 2018 after Helios Towers. The African telecommunications company, partly owned by Ethos Private Equity, was seeking a valuation of about $2 billion in a sale in London and Johannesburg. The firm was planning to announce its IPO in June 2018 but instead decided to wait until this year.
7. Airtel Africa
Bharti Airtel, India’s second-biggest wireless carrier, delayed a planned IPO of its Africa unit due to the turmoil in emerging-market stocks. According to Bloomberg, the company, which was originally aiming to list the unit in London by March 2018, pushed back the share sale by about half a year.
But, in November 2018, Bharti Airtel appointed eight banks for the intended IPO on an "international stock exchange". They appointed JP Morgan, Citigroup Inc, BofA Merrill Lynch, Absa Group Limited, Barclays Bank PLC, BNP Paribas, Goldman Sachs International and Standard Bank Group Ltd.
In October last year, Bloomberg reported that the company, which operates in Kenya and the UK, planned an IPO in the first quarter of this year. But, CEO, Ronald Karauri, told Reuters that the Kenyan online sports betting firm does not plan to go public. Though, a source in the market told Reuters there had been conversations between SportPesa and Nairobi-based Kestrel Capital on a potential transaction.
9. Oragroup SA
Togolese lender Oragroup SA has plans to raise 56.9 billion CFA francs ($100 million). This will be the biggest IPO for West Africa’s regional exchange. Oragroup will list 20% of its equity on the Bourse Regionale Des Valeurs Mobilieres in Ivory Coast’s capital, Abidjan, as it wants to raise funds to grow operations across 12 countries.
The group said in an emailed statement to Bloomberg in October 2018. The bank will issue 6.1 million new shares and sell 7.8 million existing shares at 4,100 francs per share.
10. Jumia Group
In September last year, Reuters reported that German startup investor Rocket Internet was preparing its African online shopping platform Jumia for a possible NYSE IPO in the first quarter of 2019. It added that the listing would potentially value the firm at about $1 billion.
Citi Bank, Morgan Stanley and Berenberg were believed to be coordinating the IPO. Though, it wasn't the first time Rocket Internet was reported to be interested in pursuing an IPO for Jumia.
In March 2018, an IPO for late 2018 or early 2019 in either Frankfurt or London was also reported. Berenberg, which has a track record of working with Rocket Internet, was also among the banks linked with the possible listing.