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You never get a second chance to make a first impression, so it’s been said. Indeed, Absa Bank Uganda, a subsidiary of Absa Group, one of Africa’s largest financial institutions, has spared in doing its best as Airtel Uganda’s Lead Transaction Advisor⏤ for obvious reasons.
First of all, it is the sheer size and significance of the Airtel IPO. The telco has put up for the IPO, 8,000,000 shares (20% of the issued shares) for UGX100 per share, a transaction that should realise some UGX800 billion (USD 212 million) that the company says it needs to bulk up funding for its ambitious expansion plans and future growth strategy. The offer shall close on 13th October 2023 and thereafter the company shall on 31st October 2023, list the entire 40 billion shares on the Main Investment Market Segment of the Uganda Securities Exchange (USE). This values the company at UGX4 trillion.
In size, this will be Uganda’s second largest and second telco IPO after the 2021 MTN Uganda IPO in which 4,477,808,848 shares (20%) were put up for sale at UGX200, valuing the entire company at the time at UGX4.48 trillion.
Secondly, even though Absa’s investment banking and advisory practice in the capital markets is well-matured especially at the home base in South Africa, this will be Absa Uganda’s first IPO participation as a lead transaction advisor since the Absa brand entered the Uganda market in November 2019. As such, it is mission-critical that Absa gives it its all.
Thirdly, although it remains unsaid market watchers will be silently comparing Absa’s performance with that of Standard Bank’s SBG Securities which was the Lead Transaction Advisor on the MTN IPO. Standard Bank is Absa’s arch-rival on the continent. How well Absa handles this will largely determine who, between Absa Bank Uganda and SBG Securities handles the next big capital markets transaction in Uganda.
A lead transaction advisor in an IPO (in this case Absa Bank Uganda), is chosen for their extensive knowledge of the financial markets in question. They also possess specialised knowledge of the company and the sector in which it operates. Their role is to among other roles, advise the client (in this case Airtel) on several issues that will drive the IPO’s success, including timing, market environment, market appetite, deal structuring and pricing.
Absa, on its website boasts of “an impressive track record in raising debt and equity capital backed by extensive financial capabilities” something it says, makes Absa “well-positioned to develop a bespoke solution for your business”.
“Our competencies include initial public offerings, rights issue advisory and underwriting, follow-on offerings (primary capital raises, secondary placements and marketed offerings), convertible bonds and strategic share buy-backs. We also provide investor relations advisory and corporate access services to leverage interaction with local and global institutional investors,” Absa says of its services.
Speaking at the launch of the Airtel IPO on August 29, 2023, Mumba Kalifungwa underscored Absa’s most-recent involvement in the 2019 Airtel Africa IPO as a joint book runner and joint issuing house on the London Stock Exchange (LSE) and the Nigerian Stock Exchange (NSE).
“We look forward to a successful IPO and commit to providing our expertise to see this through. We are a truly African bank, keen on contributing to Africa’s growth trajectory, inspired by our purpose of empowering Africa’s tomorrow together one story at a time. This IPO is yet another opportunity to showcase our commitment to being an active part of Africa’s growth story as it brings a great opportunity to increase the participation of Ugandans in owning shares in one of the leading telecoms companies in this country,” Mumba said.
A wealth of glocal investment banking experience
To lead the entire deal in and outside Uganda, especially at the Airtel Africa Group level and the London and Nigerian Stock Exchanges where Airtel Africa, the parent company is already listed is Hasnen Varawalla, the Managing Director and Co-Head, Investment Banking Origination at Absa UK. In that role, he advises clients on corporate finance, capital markets as well as mergers and acquisitions (M&A).
His role on the IPO, according to Absa, is mainly, “acting as the key lead, as well as driving the initial pitching of the advisory mandate in the acquisition of this deal, as well as leading key client engagements at the Group level”.
Hansen has over 25 years of investment banking experience spanning Europe, Africa and Asia having advised on over 125 capital markets and M&A assignments during this time.
He joined Barclays Africa (that has since rebranded to Absa) in 2013 as the Head of Corporate Finance and has held various positions including Co-head of Investment Banking based in Johannesburg before relocating to London in 2019. Before joining Barclays, he was the Deputy Head of Investment Banking at Renaissance Capital where he is reputed for building their pan-emerging markets investment banking business. While at Rennaisance Capital, he also co-chaired the USD 630 million Macquarie Renaissance Infrastructure Fund. He began his investment banking career at Credit Suisse in London in 1995, leaving in 2006 as a Managing Director.
Throughout his career, the Indian Institute of Technology, Bombay and IMD Business School trained executive has advised on several telecom sector transactions including IPOs both on the continent and globally. Specifically on the African continent, he has advised on several transactions in the telecom sector including the Airtel Africa IPO on the London and Nigerian Stock Exchanges; the Vodacom Tanzania IPO, the largest-ever IPO on the Dar es Salam Stock Exchange as well as the sale of Telecel Zimbabwe to Zarnet in 2016. He also advised on the investment by Berkshire Partners in Teraco Data Environments, a provider of data centre services in South Africa as well as the Privatisation of Telecom Egypt via an IPO and the Celtel Zambia IPO. He also advised on the acquisition of MTN’s South African towers portfolio by IHS Holdings Limited and led the Absa team as the only African book-runner on the NYSE IPO of IHS Holdings Limited. He has also advised on various Eurobond financings for Helios Towers and IHS Holdings Limited, as well as the Nigerian sale of 9mobile to Teleology Holdings Limited.
Outside of Africa Hasnen was involved with the KCell IPO in Kazakhstan, on behalf of Telia and Amun Capital on the London Stock Exchange as well as the privatisation IPO of Matav (Hungary) on behalf of Deutsche Telekom and the Hungarian Government on the NYSE. He also advised on the IPO of Panafon (Greece) on behalf of France Telecom and the Govt of Greece as well as the Privatisation IPO Of Qatar Telecom on the Doha Stock Exchange. Other deals involved in, include the sale of Cesky Telecom to Telefonica in Spain, in 2005’ and the spin-out of the media assets of Antena 3 (Spain) from Telefonica. He has also handled numerous other transactions for other major telecoms such as Orange, KPN in the Netherlands and Swisscom, among others.
Hansen started his career as part of the Tata Administrative Service in India. He has a Bachelor in Technology (B. Tech.) from The Indian Institute of Technology, Bombay, a PGDM from The Indian Institute of Management, Calcutta and an MBA from The International Institute for Management Development, Lausanne, Switzerland.
It is therefore not surprising that Absa is not leaving anything to chance and has lined up some of its best people to lead the deal.
Leading the Uganda Country team is Mumba Kalifungwa, the Absa Bank Uganda Managing Director. His role in the IPO, we understand, is providing overall strategic input in arranging the deal. He has also been very instrumental in driving engagement with local institutional stakeholders.
Mumba has been the Managing Director and CEO of Absa Bank Uganda, since April 2020. Prior to this, he was the Executive Finance Director at Absa Bank of Botswana for 5 years and held a similar position at Absa Bank Zambia Plc until 2015.
He is a seasoned executive Level 5 leader with extensive Board experience and cross-cultural exposure working in 4 African countries at various levels of senior leadership in Southern and East Africa.
He is a Chartered Accountant by training and a “goal-oriented professional with 25 years post-qualifying experience 17 of which have been in the banking sector”.
Mumba holds a master’s degree in Business Administration (MBA) from Herriot Watt University (Scotland) and is a fellow of the Association of Chartered Certified Accountants (United Kingdom); and the Association of International Certified Professional Accountants (AICPA, UK). He is also an alumnus of the IMD Business School Lausanne, Switzerland
His organisational leadership experience cuts across people management, risk management, capital and liquidity management, and financial management. Some of his prior investment banking transaction experience includes the USD 300 million syndication loan to fund the expansion of a mine in Zambia and the USD 100 million debt facility to support the sustainability of a key strategic national asset in Botswana. Both deals were by Absa.
David Wandera, Absa’s Executive Director and Head of Financial Markets, in Uganda, has also been an instrumental figure in the Airtel IPO whose responsibility has largely been, leading engagements with the regulators (CMA – Capital Markets Authority) and ensuring all regulatory terms were adhered to.
Prior to Absa, he worked with Stanbic Bank Uganda Limited as the Head of Sales Global Markets.
He is a seasoned banker with 18 years in the banking sector, with a rich financial markets experience. Some of the key clients serviced in the telecoms sector, include MTN, Airtel and Africell. He has also provided financial markets solutions to clients in the pensions and Fund Management space including the National Social Security Fund (NSSF), Sanlam Insurance and Britam Insurance amongst others.
He is the former Chairman of the Uganda Bankers Association Treasurers Forum and the current Chair of the Bonds Market Forum subcommittee, which involves constant interaction with key financial markets stakeholders, such as Capital Markets Authority, Bank of Uganda and the Fund Managers Association of Uganda.
Irene Mutyaba, the Absa Bank’s Corporate Banking Director, has also been instrumental in playing a lead advisory role as well as client relations management.
A seasoned banker, with 17 years of banking knowledge, mainly in the corporate and investment banking space, she has amongst many other roles, worked as the head of global corporates, head of local and international corporates, head of commodity traders and agriculture among others in the industry.
Irene started her career at Standard Chartered Bank in 2004 and has worked in numerous markets to gain international experience, including in Ghana, Singapore, Hong Kong, China, the United Kingdom and the United Arab Emirates.
She holds a bachelor’s degree in Social Sciences – first class (hons) from Makerere University and is currently pursuing her MBA at the Durham Business School in the UK.
“She’s a seasoned professional with a track record of championing change, driving strategy and building a high-performance culture”, according to the Bank.