Actis to sell 38pc of Uganda's Umeme in IPO

London-based private equity fund Actis will be selling a 38.3 per cent stake in Uganda’s power distributor, Umeme, in an initial public offer (IPO) that opens Monday.

Actis on Friday announced that it will be selling 622.37 million shares of Umeme at the Uganda Securities Exchange (USE), a move that will bring the number of listed firms at the Uganda bourse to 15.

The company said that the IPO which has received the approval of the Capital Markets Authority (CMA) in Uganda will be closing on November 7 and that it will thereafter seek approval to list at the Nairobi Securities Exchange (NSE) by introduction.

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“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,” said Charles Chapman the power distributor's managing director.

East African retail customers have been offered 20 per cent of the shares, qualified institutional investors in the East African Community (25 per cent), international investors (46 per cent) and Umeme employees and directors 9 per cent of the total shares on offer.

Consumers of electricity in Uganda who purchase shares will receive additional free shares, said the company in a statement.

Umeme said that funds raised from the IPO will be used to reduce the company’s interest-bearing debt and enable it secure better financing options to help fund its capital investment program.