In a historic moment for Ethiopia’s financial market, Ethio Telecom, the country’s largest telecom operator, has announced the launch of its long-awaited public share sale. This offering marks the first time in the company’s history that ordinary shares will be made available for public purchase, creating an unprecedented opportunity for Ethiopian citizens to own a stake in one of Africa’s leading telecom giants.
The offer, which consists of 100,000,000 ordinary shares at a fixed price of ETB 300 per share, is expected to raise significant capital. This offer represents 10% of the company’s issued share capital, giving Ethiopian investors a unique opportunity to own shares in a company that has long been the backbone of the country’s communication infrastructure.
Exclusive Offer for Ethiopian Citizens
This offer is available exclusively to Ethiopian citizens who are physically present in the country. The application process is straightforward and accessible via the “Ethio Telecom Share Offer” option on the Telebirr Superapp. The application platform will go live at midnight on October 17, 2024. Ethiopian investors can apply for as few as 33 shares, with a minimum investment of ETB 9,900, or as many as 3,333 shares, for a maximum of ETB 999,900. The application process is open 24/7 and is expected to attract strong demand from a wide range of investors.
Ethio Telecom’s CEO commented on the offer’s significance:
“This share sale not only represents a major step in the history of Ethio Telecom but also in the development of Ethiopia’s financial markets. We are proud to open this opportunity for Ethiopian citizens to become part-owners of one of the most critical companies in the country.”
Lock-In Period and ESX Listing Plans
Upon completion of the offer, the shares will be subject to a lock-in period. Investors will not be allowed to trade, sell, or transfer their shares until Ethio Telecom completes its anticipated listing on the Ethiopian Stock Exchange (ESX). While the company intends to complete the listing within 12 months of the offer’s close, it has cautioned investors that there is no guarantee this will occur within the projected timeline. However, once the listing is completed, investors will have the ability to freely trade their shares on the ESX.
Key Dates and Application Period
The offer period is scheduled to run from midnight on October 17, 2024, until January 3, 2025, with the possibility of an extension if demand falls short of expectations. However, given the potential over-subscription, the company has set an application cap of 200,000,000 shares, and investors are advised to act promptly. If the offer is fully subscribed, any over-subscriptions will be returned to applicants within 10 working days after allotment.
This move to extend public ownership is part of Ethio Telecom’s broader ambition to democratize access to the Ethiopian corporate sector. With public interest already piqued, the company has emphasized its goal to maximize public participation.
No Withdrawal of Applications – Investors Advised to Exercise Caution
Once an application has been made, it cannot be withdrawn, ensuring investors carefully assess the offer before committing. Prospective investors have been urged to exercise caution, as they will not have the ability to alter or cancel their application once submitted.
If the company is required to issue a supplementary prospectus due to any material changes during the offer period, the offer will be temporarily suspended, allowing investors to withdraw their applications if needed. However, the company does not anticipate such an event and expects a smooth transition toward completing the offer.
A New Chapter in Ethiopian Corporate History
Ethio Telecom’s majority shareholder has worked diligently to ensure the public can participate in the company’s future success. The decision to sell 100,000,000 shares is seen as a major step in fostering a more inclusive economic environment, particularly for the telecom sector, which has long been a state monopoly.
The success of this offer could serve as a template for future public offerings in Ethiopia, particularly as the country opens its financial markets through the establishment of the Ethiopian Stock Exchange. Analysts expect Ethio Telecom to be among the most sought-after companies once the ESX becomes operational.
Ethio Telecom’s CEO concluded:
“We are embarking on a new chapter in the Ethiopian corporate landscape. By opening Ethio Telecom to public ownership, we are giving citizens a stake in the future of the country’s communication infrastructure. We are confident this offering will foster both economic empowerment and financial growth for our nation.”
Ethio Telecom: A Telecom Powerhouse
Founded in 1894 as Africa’s first telecom company, Ethio Telecom has been the lifeline for communications in Ethiopia, providing a range of services that support over 66 million customers across the country. With exclusive rights to operate in the country for many years, the company is now undergoing significant transformation as it expands its services and modernizes its infrastructure to meet the demands of Ethiopia’s rapidly growing economy.
The public share offering is expected to draw widespread interest, as investors are eager to be part of the telecom powerhouse’s growth story. With the introduction of 4G and 5G networks, continued expansion into rural areas, and a growing customer base, Ethio Telecom is positioned for long-term success, making this share sale a pivotal moment in Ethiopia’s economic trajectory.
Major Shareholder Sells 10% Stake: Proceeds to the Majority Shareholder
The sale of these shares, all owned by the Majority Shareholder, is expected to generate substantial proceeds, although none of the funds will go directly to the company. Instead, all proceeds from the sale will be directed to the Majority Shareholder. This sale is part of Ethio Telecom’s broader plan to engage the public in the company’s ownership structure as it prepares for its intended listing on the Ethiopian Stock Exchange (ESX), which is set to be established within the next 12 months.
Looking Forward: What’s Next for Investors?
Following the close of the offer on January 3, 2025, or when the 200,000,000-share cap is reached, investors will be eagerly awaiting the announcement of share allotments. Successful applicants will see their shares locked in until the anticipated ESX listing, with dividends and voting rights on par with existing shareholders.
For now, investors are encouraged to apply early, given the potential for over-subscription. The offer represents a rare chance for Ethiopian citizens to own a piece of a company that has been integral to Ethiopia’s development for over a century.
As the clock ticks towards the completion date for the share offer, the Ethiopian financial landscape is set for a transformation. Ethio Telecom’s move to invite public participation is a bold step that could pave the way for future privatizations and share offerings, opening new doors for investors and transforming the economic fabric of the nation.