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Actis has announced its subsidiary, Umeme Holdings Ltd (UHL), has sold a total 45.7% of Ugandan electricity distribution company, Umeme Ltd for US$98 million to Ugandan retail investors.
Umeme's Directors and Managers invested US$6 million in the share purchase and have increased their shareholding in the company to approximately 5% from the previous 2%. In the institutional offer, Investec Asset Management increased its shareholding to 18% to become the largest shareholder, while the Ugandan National Social Security Fund became the third largest shareholder after increasing its shareholding from 8% to 14%.
Following this transaction Actis subsidiary, UHL, remains the second largest shareholder in Umeme, with a 14.3% shareholding.
David Grylls, Partner at Actis, stated:
We have been delighted by the strong take-up of Umeme shares, first by heavyweight institutional investors, and now by retail investors and Umeme Management and Directors. Not only is this indicative of a healthy appetite for solid Ugandan companies, but also a commitment to Uganda's powerful macroeconomic story. This can only be good for Uganda's capital markets.
Patrick Mweheire, Lead Transaction Advisor at Stanbic, stated:
The accelerated book-build for Actis' sale of a stake in Umeme was highly successful and the first of its kind. It signalled significant appetite from both institutional African investors and international investors who are keen to tap into the opportunity in these increasingly sophisticated and liquid markets, this was evident in the strong demand seen across all investor classes (including retail and management) for the transaction.
Umeme is the largest electricity distribution company in Uganda. As an electricity distributor, Umeme is mandated to: operate, maintain, upgrade and expand the distribution network; retail electricity to its customer; and improve efficiency within the electricity distribution system.
Umeme continued to return strong results for the year ended 31 December 2013. Earnings before Interest Taxation Depreciation & Amortization (EBITDA) grew by 27% to UGX149 billion (US$57.1 million) in 2013 from UGX117 billion in 2012. Profit after tax grew from UGX57 billion in 2012 to UGX84 billion (US$32.2 million) in 2013.