Share Sale Results: Only a Fraction Sold
Six months after launching Ethiopia’s first-ever Initial Public Offering (IPO), Ethio telecom announced it had sold just 10.7 million out of the 100 million ordinary shares on offer. Initially planned to run from October to January, the IPO was extended by an additional five weeks and officially closed in February.
Investor Participation and Fund Collection
At a ceremony held Friday afternoon at the Skylight Hotel, CEO Frehiwot Tamiru revealed that 47,377 investors participated over 121 offer days, raising a total of 3.2 billion birr.
Although there had been interest from banks and Ethiopian-born foreign nationals, Frehiwot confirmed that only individual investors completed purchases during this round.
“The limited sales were largely due to the restrictions we imposed,” Frehiwot explained in response to media questions.
Investment Terms and Current Status
Investors were required to buy a minimum of 33 shares (worth 9,900 birr) and could purchase up to 3,333 shares (valued at 999,900 birr), with each share priced at 300 birr. Funds collected from the IPO will remain in a blocked account until further decisions are made about the unsold shares.
Frehiwot indicated that internal discussions regarding the next steps are ongoing.
Ethio Telecom’s Position in Ethiopia’s Securities Exchange
Ethio telecom is among five state-owned enterprises designated to list on the Ethiopian Securities Exchange (ESX), which officially launched in January, three months after the telecom’s IPO opened.
However, Wegagen Bank became the first to actually list on the new exchange, offering 6.2 million shares. The Exchange has set a target of listing up to 50 companies within five years to build a dynamic capital market.
Public Education and Challenges Ahead
Frehiwot highlighted that Ethiopia’s public needs more exposure to and education about capital markets if future share offerings are to see greater participation.
The relatively muted public response adds to the challenges facing Ethiopia’s broader push to partially privatize major state assets.
Privatization Efforts: Setbacks and Delays
The government first announced plans to privatize 40% of Ethio telecom in June 2021, but the effort was suspended by March 2022 due to unfavorable global and local economic conditions. Although revived in late 2022, strong contenders like the Emirates Telecommunications Group and France’s Orange ultimately withdrew from the process.
