Orange selects BNP, Morgan Stanley to support African IPO

Orange selects BNP, Morgan Stanley to support African IPO

09 January 2020 | Natalie Bannerman

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Orange is rumoured to have chosen BNP Paribas and Morgan Stanley to advise on a proposed initial public offering (IPO) of its Middle East and Africa business.

According to sources close to the matter, both financial companies are helping Orange prepare for the listing, although an underwriting consortium has yet to be formed. Orange is said to be planning to invite more banks to join the deal at a later stage.

Bloomberg says that the deal is set to become one of the biggest listings to come out of the Middle East and Africa (MEA) in 2020, with London and Paris down as potential venues for the share sale which could happen as soon as the first half of the year.

As discussions are still at an early stage and nothing has been finalised BNP Paribas and Morgan Stanley have yet to comment on the deal. However, in a statement to Bloomberg, Orange said that ‘it put all its Middle East and Africa activities into a separate entity to provide “various options for growth”. And IPO is one potential scenario and the ultimate decision will depend on factors including which option will best accelerate the company’s growth’.

If all goes ahead, Orange will follow in the footsteps of Helios Tower, which in October 2019 completed its IPO on the London Stock Exchange for $1.45 billion. Also Airtel Africa announced in June that it was seeking to raise $750 million on the London Stock Exchange in an attempt to pay down its debts.

Orange’s MEA business reported earnings of €1.67 billion EBITDA in 2018, accounting for 13% of the group’s adjusted EBITDA. In addition, revenues for the business increase 5.1% during that same period totalling €5.2 billion.

The news comes as the company recently announced the opening of its Morocco. Inaugurated in the presence of Stéphane Richard, Chairman and CEO of Orange and  Alioune Ndiaye, CEO Orange Middle East and Africa, Richard said:

“One of the key success factors behind new services is to develop them in Africa so that they are adapted to specific local requirements and so meet the needs of our customers. That is why we have decided to organise the management of our business in Africa and the Middle East from within the region directly from the African continent.”

“It sends a highly symbolic message, a turning point in the history of the Group that provides further proof of our desire to be even closer to our customers and to make Orange MEA the preferred multi-services operator for people in Africa and the Middle East,” added Ndiaye.