Shares in Uganda’s electricity distributor, Actis-backed Umeme, have begun trading on the Uganda Securities Exchange (USE).
Uganda’s Vice President, Hon Edward Ssekandi rang the bell on the IPO at a special event at the Kampala Sheraton, to which the USE had relocated for the day.
The stock closed at a weighted average price of Ugandan shillings 275, unchanged on the offer price.
The IPO of Umeme, which has been an Actis investment since 2005, was oversubscribed by 37 per cent, with particular demand from East African institutions and Ugandan retail customers. The offering, which closed on 7 November, is one of the largest ever in the Ugandan market, and Umeme will become the first company to cross list from Uganda to Kenya, with an expected listing on the Kenyan Stock Exchange in mid-December.
So far Actis has invested over USD134m in modernising Umeme’s distribution system. By the end of 2011, Umeme had increased its customer base from 250,000 to about 460,000 customers, reduced energy losses from over 38 per cent to 27 per cent, and increased revenue collections from 75 per cent to over 98 per cent. Connecting over 50,000 power-hungry customers to its network per year, Umeme now directly employs over 1,300 staff.
The offer price of 275 Ugandan shillings (c. USD10.5 cents based on 2,600 UGS to the USD) values 100 per cent of Umeme at USD165m. The total number of shares on offer was 622.38m, split between 272.4m new (primary) shares and 350m existing (secondary) shares. This represents 38 per cent of the company’s capital at listing and gives a deal size of approximately USD66m. Actis retains a 60 per cent stake in Umeme.
Funds raised from the IPO will be used to reduce the company’s interest-bearing debt and enable Umeme to secure better financing options over the next few years in order to help finance its capital investment programme.
Torbjorn Caesar, co-head of the Energy Fund at Actis, says: “We have been on a ten-year journey with Umeme. In 2005 we took on a physical network crippled by rotten poles and a lack of maintenance. Our investment has enabled the replacement of over 120,000 poles and the complete restructuring of the business to offer a fairer deal to Ugandan consumers. The fact that those consumers can now own a part of the company which provides their light and energy is a source of tremendous pride for all of us at Actis.”
