Senegalese telecommunications operator Sonatel will implement a 10-for-1 share split on the West African regional stock exchange on October 26, increasing its outstanding shares to 1 billion from 100 million while keeping its share capital unchanged.

The split, approved by shareholders at an extraordinary general meeting on October 8, will reduce the nominal value of each share to 50 CFA francs from 500 CFA francs. Sonatel said the move is intended to make its shares more accessible to investors and broaden its shareholder base.

Under the arrangement, each existing share will be converted automatically into 10 new shares. The company’s share capital will remain at 50 billion CFA francs.

The BRVM, which serves eight West African countries, confirmed October 26 as the effective date of the operation in its official notice. Friday, October 23, is the final trading day under the existing share structure.

What the Sonatel share split means for investors

The Sonatel share split will increase the number of shares held by each investor without changing the investor’s percentage ownership of the company, assuming no other transactions affect the holding.

An investor holding 10 Sonatel shares before the split will hold 100 shares afterward. The nominal value per share will fall by the same factor, leaving the theoretical total value of the holding unchanged at the time of the adjustment, before any market-price movements.

The split does not, by itself, create additional wealth for shareholders or increase Sonatel’s underlying business value. The market price per share is expected to adjust to reflect the new share structure, although the actual trading price will depend on market conditions.

Sonatel said the BRVM would publish the adjusted reference price in an official market notice. Investors should therefore distinguish between the mechanical reduction in the price per share and any subsequent movement driven by buying and selling.

The adjustment will be processed automatically by the relevant central depository and account-holding institutions. Sonatel said shareholders would not need to submit applications or complete additional formalities, and the operation would be carried out without fees.

Company aims to widen investor participation

Sonatel said the operation is intended to improve access to its shares and expand its shareholder base. A lower nominal value per share can reduce the amount needed to purchase a whole share, although the actual market price and any applicable brokerage fees will determine the cost of buying the stock.

The split could make it easier for some smaller investors to purchase shares or adjust the size of their holdings. It may also facilitate trading by allowing investors to transact in smaller monetary increments, depending on market rules and trading conditions.

However, a lower price per share does not guarantee higher liquidity. Trading activity also depends on investor demand, the number of shares available for trading, market conditions and the costs associated with buying or selling securities.

The company has not changed its share capital as part of the operation. Instead, it is dividing the existing ownership structure into a greater number of shares, with each share representing a smaller nominal amount.

The change will take effect at the opening of the BRVM market on October 26, when Sonatel shares will begin trading under the adjusted structure.

Sonatel remains a major regional listed company

Sonatel is a telecommunications operator headquartered in Senegal and part of the Orange group. Its shares trade on the Bourse Régionale des Valeurs Mobilières, commonly known as the BRVM, the regional exchange based in Abidjan that serves the West African Economic and Monetary Union.

The exchange provides a market for listed companies and securities across the eight-member monetary union, which includes Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.

Sonatel’s share split is a corporate action affecting the number and nominal value of its shares rather than the amount of capital invested in the company. Investors assessing the stock will still need to consider the operator’s financial performance, dividend policy, business prospects and prevailing market valuation.

The split also does not guarantee a change in the company’s market capitalisation. In principle, the market value of all outstanding shares remains unchanged immediately after a purely mechanical split, assuming the market price adjusts proportionately. Subsequent trading can move the valuation in either direction.

Key dates for shareholders

Sonatel’s official announcement sets out two important dates for the operation. October 23 is the final trading day under the old share structure, while the new structure takes effect at the market opening on October 26.

Shareholders are expected to see the change reflected through the automatic adjustment of their positions by the relevant institutions. The BRVM will communicate the adjusted reference price through its official market bulletin.

Investors who require clarification about their accounts or the treatment of their holdings can contact their securities brokerage firm, known in the region as a Société de Gestion et d’Intermédiation, or Sonatel’s investor relations department.

The split will increase the number of Sonatel shares in circulation tenfold, but the company’s stated share capital will remain at 50 billion CFA francs. Its effect on trading activity and investor participation will become clearer after the shares begin trading under the new structure on October 26.