In a groundbreaking moment for Ethiopia’s economy, Ethio Telecom has launched its first Initial Public Offering (IPO), marking a significant step in the country’s journey towards a fully functioning capital market. The state-owned telecom giant is offering a 10% stake to retail investors, a move expected to reshape the investment landscape in Ethiopia.
This IPO marks the first time a major Ethiopian company has opened its shares to the public, signaling a shift toward privatization and broader financial market development in the country.
Ethio Telecom has a total paid-up share capital of 100 billion birr, divided between 29.2 billion birr in cash and 70.8 billion birr in kind. The company has been restructured into a share company, a necessary legal requirement for conducting the IPO.
The IPO will see 100 million ordinary shares offered to the public at a price of 300 birr per share. The subscription period runs from October 16, 2024, to January 3, 2025, or until 200 million shares are applied for, with a minimum purchase set at 33 shares for 9,900 birr and a maximum of 3,333 shares for 999,900 birr.
Deloitte has been engaged as the transaction adviser for the offering, guiding the process and assisting in the preparation of the company’s prospectus. Investors must make their payments within 48 hours of applying, and once paid, applications cannot be withdrawn.
After the subscription process, shares will be allocated, and digital share certificates will be issued, with completion expected by January 31, 2025.
The offer is limited to Ethiopian citizens who are physically present in Ethiopia during the subscription period. Applicants are required to use Telebirr mobile money accounts and must provide digital identification to complete their applications.
Additionally, shares can be purchased on behalf of others through a power of attorney, and parents or guardians can buy shares for children with notarized documentation.
Speaking at the IPO launch, Ethio Telecom officials hailed the move as a crucial development for both the company and the country’s financial system. This IPO is expected to attract significant interest from local investors and sets a precedent for future offerings from other state-owned enterprises.
Ethio Telecom’s IPO offers an opportunity for Ethiopian citizens to own a piece of one of the country’s most profitable enterprises, while also laying the foundation for more dynamic and inclusive capital market participation in the future.
With the government’s plans to list more state-owned enterprises, this IPO marks a significant step in Ethiopia’s economic transformation and its ambition to integrate more fully into the global financial market.
Source: Bloomberg
