UGANDA’S SOLE power distributor, Umeme, has priced its 622.38 million shares to be sold through an Initial Public Offering (IPO) at Shs275 ($0.11) per share, a source close to the deal said on Friday. The shares are set to open today October 15, 2012 following approvals by the Capital Markets Authority and the Uganda Securities Exchange.
The Company is floating six hundred and twenty two million, three hundred and seventy eight thousand offer shares (622,378,000), which constitutes 38.3 percent of the Company’s issued share capital upon listing. Making the announcement, Umeme Managing Director, Charles Chapman said; “We are pleased with the approval received from the CMA, which helps Umeme achieve its goal of diversifying its ownership, while providing the Ugandan and wider East African Community and international investors an opportunity to own a stake in Umeme.” The IPO, which will close on November 7, will target East African retail customers with 20 per cent of the offer shares, qualified institutional investors in EAC with 25%, and international investors with 46%. Umeme employees and directors have been allocated 9% of the total offer shares. Consumers of electricity in Uganda who purchase shares will receive additional free shares.
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, to help finance its capital investment programme. Following the offer, all the shares will be listed on the Uganda Securities Exchange and later the Company will seek approvals to execute a listing by introduction on the Nairobi Securities Exchange. Stanbic Bank is acting as the transaction advisor and lead receiving bank, while African Alliance are the sponsoring broker.
Pricewaterhouse- Coopers is the reporting accountant, while Webber Wentzel, Masembe, Makubuya, Adriko, Karugaba & Ssekatawa Advocates (Uganda) and Anjarwalla & Khanna Advocates (Kenya) are the legal advisors.