Airtel’s plans to delist Zain face rejection in Zambia
The local capital market may halt Bharti Airtel’s plans to delist Zain Zambia Plc from the local Lusaka Stock Exchange (LuSE), according to sources close to the transaction.
And the Lusaka Stock Exchange (LuSE) has confirmed that the delisting of Zain Zambia Plc which trades as Celtel BV would impact on the development of the local capital market.
About 2,000 shareholders, owning three per cent of Zain Zambia rejected an offer of K710 kwacha a share that Bharti Airtel offered them during the mandatory offer.
According to the sources, the capital market might reject the offer to protect the interest of the “minorities who turned down the offer.”
“It’s not automatic that when you make an application to delist it is accepted immediately. You have to satisfy the provisions of the listing rules and also the companies Act and, that is what we are looking at now,” the sources said. “There is a lot going on at the level of stock market but its not automatic that when you reach more than 90 per cent, then you have to delist.”
Bharti Airtel last month applied to Securities and Exchange Commission on its plans to delist from the LuSE after increasing its stake to 97 per cent from 78.9 per cent following the mandatory offer done in compliance with local listing rules.
And LuSE said the Zain Zambia’s impending delisting would impact negative on the development and growth of the local bourse. Trading in Zain Zambia’s shares was suspended on August 2010 after Bharti Airtel bought Zain’s African assets from Kuwait’s MTC.
“It’s sad because we will now have 19 companies instead of 20 companies…when ideally we should be going to 21,” stated LuSE. “It’s not something that we welcome but technically we have arrived at this point because of what has happened.”