ugandan_diaspora_social_networking_event_2015_00

The East African | Umeme pulls a first, launches regional IPO

0
Posted October 15, 2012 by Ugandan Diaspora News Team in Business ~ 1,781 views

     

By Emmanuel Were The EastAfrican

IN SUMMARY

  • The $68.4 million offer will see Actis, the London-based private equity firm sell a 38.3 per cent stake in Umeme to the general public. Actis owns 100 per cent of the electricity distributor.
  • Umeme’s shares will each go for $0.11 with the offer closing on November 7. Ugandans, Kenyans and Rwandan investors, as well as international investors are expected to take part in the offer.
  • However, it is still unclear whether Tanzanian’s will be allowed to take part in the offer, since the country restricts its nationals from participating in IPOs because of foreign exchange restrictions.
  • Umeme plans to use the funds raised from the IPO to reduce its interest-bearing debt and be able to secure better financing options over the next few years, to help finance its capital investment programme.

Uganda’s electricity distributor, Umeme, will launch the country’s biggest initial public offer on Monday, October 15, hoping to attract investors across the region.
The $68.4 million offer will see Actis, the London-based private equity firm sell a 38.3 per cent stake in Umeme to the general public. Actis owns 100 per cent of the electricity distributor.

Umeme’s shares will each go for $0.11 with the offer closing on November 7. Ugandans, Kenyans and Rwandan investors, as well as international investors are expected to take part in the offer. However, it is still unclear whether Tanzanian’s will be allowed to take part in the offer, since the country restricts its nationals from participating in IPOs because of foreign exchange restrictions.

The offer values Umeme at $178 million, making it the second largest listed company at the Uganda Securities Exchange after Stanbic Uganda, which was valued at $398 million at the end of last week. Umeme plans to use the funds raised from the IPO to reduce its interest-bearing debt and be able to secure better financing options over the next few years, to help finance its capital investment programme.

It will be the first IPO where a Ugandan company plans to list shares for trading in both Kenya and Uganda, bucking a trend where Kenyan companies have usually cross listed at the USE. “We are pleased with the approval received from the CMA, which helps Umeme achieve its goal of diversifying its ownership, while providing the Ugandan and wider East African Community and international investors an opportunity to own a stake in Umeme,” said Charles Chapman, Umeme managing director, in a press statement.

Umeme said it will list at the NSE by introduction, where a company does not raise cash when its shares begin trading at the stock market. However, Umeme backtracked on plans to offer the IPO simultaneously in Uganda and Kenya.

READ: Umeme set for dual listing in Kenya, Uganda

The company, though, did not say why it opted to list by introduction at the NSE as opposed to offering the IPO in Kenya. Officials at Kenya’s capital market authorities said they will meet with Umeme’s officials next week to finalise the approval process. “We are supportive of Umeme’s cross-listing at the NSE but one or two things need to be checked before we approve the process,” said Kung’u Gatabaki, Chairman of Kenya’s Capital Market Authority (CMA).

By cross listing at the NSE, Umeme hopes to attract Kenyan investors who have an appetite for share offers in the region. East African retail customers have been offered 20 per cent of the shares, qualified institutional investors in the East African Community (25 per cent), international investors (46 per cent) and Umeme employees and directors nine per cent of the 622,378,000 shares on offer.

http://www.theeastafrican.co.ke/news/Umeme+in+69m+US+dollars+IPO+to+crosslist+in+Kenya+too/-/2558/1532554/-/14asfjm/-/index.html


About the Author

Ugandan Diaspora News Team

Ugandan Diaspora News Online is an independent, non political news portal primarily aimed at serving Ugandans who work and reside outside Uganda. Our aim is to be a one stop shop for everything Ugandan and the celebration of our Ugandan heritage.

0 Comments



Be the first to comment!


Leave a Response


(required)

ugandan_diaspora_social_networking_event_2015_00