Uganda NSSF to earn $2m from Airtel stake

Uganda NSSF is the second largest shareholder of Airtel Uganda after Bharti Airtel. PHOTO | FILE | DAILY MONITOR

By DEOGRATIUS WAMALA

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Uganda's National Social Security Fund (NSSF) will earn at least Ush7.9 billion ($2.1 million) from its 10.55 percent stake it holds in Airtel. 

The pay-out will be the first return on the Ush199 billion ($52.6 million) NSSF invested in the Airtel initial public offering that was closed on October 27. 

Airtel was listed on the Uganda Securities Exchange on November 6, becoming the second telecom to list on the exchange after MTN. 

Last week, Airtel announced an interim dividend pay-out of Shs76b, which will be an early return for the more than 4,600 investors.

Read: MTN Uganda declares fresh interim payout on profit rise

The pay-out comes two months after Airtel went public, promising shareholders a 95 percent dividend pay-out. 

 investor that invested in the Airtel initial public offering.  

Bharti Airtel will get the largest share of the dividend pay-out of about Ush67 billion ($17.7 million) for its 88.11 percent stake. 

The Indian-based parent company, which owns Airtel Africa, under which Airtel Uganda falls, owns a stake of 40 billion shares, of which 4.36 billion were taken up by the public. “The board of directors of Airtel at the meeting held on November 24, 2023, resolved to declare and pay to the shareholders of the company an interim dividend for the year 2023 amounting to Ush76 billion ($20 million) at a rate of Ush1.9 per share,” Airtel said in a notice last week.

Airtel also noted that the pay-out (net of withholding tax) is expected to be paid by December 21. 

NSSF bought 4.2 billion shares in Airtel for Ush199 billion on deadline day, a move which analysts said could have saved the Airtel initial public offering. 

The fund became the biggest investor in Airtel and obtained 10.55 percent of the 40 billion shares and 93 percent of the floated stock.

Read: NSSF helps Airtel Uganda to raise $52m

Airtel will deduct the amount it will issue to its shareholders from its retained earnings as of September 30, whose results are yet to be announced. 

The money will be paid to shareholders who were on Airtel’s books by November 7, the day the IPO shares went public. 

Out of the planned Ush800 billion ($211.4 million), Airtel raised Ush211.4 billion ($55.9 million) through the sale of shares between August 29 and October 27, which was just 54.45 percent of the eight billion shares offered. 

In its prospectus Airtel said it intended to issue a total of Ush500 billion ($132.1 million) in dividends for the year ending December 31. 

Thus, the Ush76 billion is an interim payment with the 2023 final dividend pay-out expected soon.