Business
Uganda electricity distributor, Umeme, launches regional IPO
(The East African) – Uganda’s electricity distributor, Umeme, will launch the country’s biggest initial public offer (IPO) on Monday, October 15, hoping to attract investors across the region.
The US$68.4 million offer will see Actis, a private equity firm sell a 38.3 percent stake in Umeme to the general public. Actis owns 100 percent of the electricity distributor.
Umeme’s shares will each go for US$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 Tanzanians 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 US$178 million, making it the second largest listed company at the Uganda Securities Exchange after Stanbic Uganda, which was valued at US$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 Uganda Securities Exchange.
