UK’s Actis sells stake in Umeme for $86 million

By standard reporter and reuters

Britain-based private equity firm Actis sold part of its Ugandan subsidiary’s stake in local power distributor Umeme Ltd for $85.5 million to institutional investors.

“Actis ... today (Monday) announced the successful sale of a substantial stake of Ugandan electricity distributor, Umeme Ltd, for $85.5 million,” Actis said in a statement.

The shares were bought by more than 20 institutional investors in a heavily over-subscribed secondary offer on the Uganda Securities Exchange (USE) and the Nairobi Securities Exchange (NSE), according to the statement. Umeme Ltd has a cross-listing in Kenya.

Uganda’s State-run pension fund, National Social Security Fund (NSSF), and South Africa’s Investec Asset Management, were now the leading institutional investors in Umeme, Actis said.

Actis’ Ugandan subsidiary, Umeme Holdings, had said in early May that it was selling 45.1 percent out of the 60.08 per cent stake it owned in the utility.

Actis said in its statement that it planned to hold its remaining minority stake in Umeme for at least two years.

Umeme Ltd has a 25-year power distribution concession in Uganda although a parliamentary report in March asked the government to cancel the contract because of the alleged skewed nature of its contract and poor performance.

Umeme has said it doesn’t expect the government to act on the parliamentary resolution and says it has met all its contractual obligations.

“By divesting the Umeme shares to such credible investors, Actis is further enhancing the energy sectors,” the statement quoted Uganda’s Energy ministry Permanent Secretary, Kabagambe Kalisa, as saying.

Umeme reported an 89 per cent rise in pretax profits last year, to USh115.2 billion.

Umeme Limited suspended trading at the USE for two weeks early this month to facilitate sale of a block of shares in the company.

private placement

The major shareholder of the company, Umeme Holding Limited, according to a public notice, contemplated a sale of a substantial block of its shares to selected institutional and non-institutional investors and management of the company by way of private placement.

The company said if the deal is successfully concluded, it might have an effect on the company’s securities.

The company said it wanted to facilitate the conclusion of the deal without disruption of the price of its shares.

“In light of the suspension of the shares of Umeme from trading in the market of their primary listing, the shares of Umeme will similarly and automatically be suspended from trading on the Nairobi Securities Exchange,” the company stated in a statement carried in the local newspapers.