Govt, Airtel yet to agree on share sale

Dar es Salaam. Planned initial public offerings (IPOs) for Airtel Tanzania and Tigo Tanzania will take longer than expected as shareholders grapple with decision-making on the right numbers and values of shares to offload,The Citizen understands.

According to the Electronic and Postal Communications Act (Cap 306), which was amended in June last year, mobile phone firms are compelled to offload 25 per cent of their shares to Tanzanians via the Dar es Salaam Stock Exchange (DSE) as the country seeks to reap maximum benefits from the firms’ proceeds.

Going by the provision, mobile phone firms rushed to submit their draft prospectuses between November and December last year as they sought to beat the January 1, 2017 deadline of doing so as required by the law.

However, The Citizen has reliably learnt that so far, it is only Vodacom Tanzania that has passed in several of the requirements while the skeleton prospectuses for Tigo and Airtel have not made any meaningful stride due to boardroom wavering among shareholders.

Figures by the Tanzania Communications Regulatory Authority (TCRA) put Tigo and Airtel in the second and third positions respectively with regard to the voice subscription market share.

They have market shares of 29 and 26 per cent respectively while Vodacom leads with 31 per cent.

To be allowed to proceed, the companies are required to strike a balance in their shareholding books so much that they can be able to change the status from being private limited companies to public companies.

However, both Airtel and Tigo shareholders are still having their own differences to settle before they can proceed with applications.

The government owns 40 per cent of Airtel Tanzania shares while the rest are owned by India’s Bharti Airtel. “The two shareholders have not yet agreed on how many shares each party should offload to the public in the planned IPO,” a source told The Citizen.

Yesterday, President John Magufuli met the founder and chairman for Bharti Enterprises, Indian billionaire Sunil Bharti Mittal, at the State House in Dar es Salaam and, according to an Airtel Tanzania statement, the two discussed Airtel’s business operations in Tanzania.

In the course of their deliberations, Mr Mittal expressed his willingness to list Airtel Tanzania’s shares on DSE.

As for Tigo, remains tightlipped especially regarding last week’s Court of Appeal decision to summon Briton James Alan Bell to the hearing of an application on the controversial sale of 34,479 shares in MIC Tanzania Limited, (Tigo) to Golden Globe International Services Limited.

Golden Globe, allegedly owned by a Dar es Salaam based businessman, is reported to have acquired the shares in the telecommunications firm for Sh13 billion.

Mobile phone firms risk being fined or having their network operating licences suspended if they fail to meet the mandatory listing requirement.

In Tigo’s case, Registrar of Court of Appeal, Mr John Kahyoza, indicated in the notice that the application hearing, which had been called on the court’s “suo mottu” (own motion) was to be heard by a panel comprising Justices Mbarouk Mbarouk, Augustine Mwarija and Shaaban Lila on February 15.

“With such challenges, it is impossible for capital market regulators to proceed with Tigo’s application and that is why the firm’s draft prospectus has not yet gone beyond that very initial level,” the source said.