NSSF Uganda buys stake in Equity after stock sale

Ugandans have acquired a minority stake in Equity Bank, through their public pension scheme. Equity Group announced yesterday that National Social Security Fund (NSSF Uganda) had bought over 90 million shares, equivalent to a 2.44 per cent stake.

The estimated value of the transaction is Sh4.5 billion, for a part stake until the sale held by Africa focused investment firm Helios.

"Helios and NSSF Uganda hereby announce for the information of the general public that NSSF Uganda has acquired from Helios a 2.44 per cent stake in Equity Group at a price of Sh50 per share," Kenya's Capital Markets Authority said in a statement.

NSSF Uganda is now the seventh largest shareholder, behind among others Group Managing Director James Mwangi. The deal marks another step in the gradual exit of Helios, previously the single largest shareholder, from the bank with subsidiaries in four African countries including Uganda.

NSSF Uganda is a provident fund covering employees in the country's private sector - exactly mirroring the Kenyan scenario. Helios booked the sale at a premium compared to the prevailing market price of Sh45.75 a piece, which would translate to a 'neat' profit of Sh384 million.

In January, Helios said it had cut its stake in the bank by half after selling the other half, equivalent to 12.22 per cent, to Norway's Norfininvest AS. Unlike the sale to NSSF Uganda, the price per share in the Helios' transaction with Norfininvest AS was never disclosed.

Norfininvest is jointly owned by Norfund, the Norwegian Investment Fund for developing countries, and Norfinance AS. The investment in Equity Bank came in 2007 when the strategic investor brought in just over Sh11 billion in exchange of a 24.45 per cent stake.

Then as a small lender that has had one of the most remarkable growth, the value of the stake at today's market price is over Sh42 billion. Its exit could indicate Helios has identified better growth opportunities in other smaller companies.

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