Umeme technicians repair power lines in Kampala. Actis has 60.08 per cent shareholding in the Ugandan electricity vendor. Photo/FILE
What you need to know:
Details on the shares and the price as well as the identity of the strategic investors will be made public when the deal is sealed.
Actis will be selling a stake in the utility company for the second time in less than two years. It first invested in Umeme in 2005.
UK-based private equity firm Actis is set to dispose of a chunk of its shares at the Nairobi Securities Exchange (NSE) cross-listed power firm Umeme.
The Uganda electricity vendor on Tuesday suspended trading of its shares on the Uganda Securities Exchange (USE) and Nairobi Securities Exchange (NSE) after the majority shareholder said it was selling a significant part of its stake.
Actis has a 60.08 per cent shareholding in Umeme and has found an undisclosed group of investors to buy part of its shareholding.
“Umeme hereby announces... that it has received notification from one of its major shareholders Umeme Holdings Limited — a subsidiary of Actis Infrastructure 2 LP which owns 60.08 per cent of the issued ordinary shares of Umeme — that it wishes to sell a significant portion of the shares it owns in Umeme to selected investors by way of private placement,” said Umeme in a statement.
Details on the shares and the price as well as the identity of the strategic investors will be made public when the deal is sealed, the PE firm said.
“Due to corporate governance restrictions, Umeme cannot comment further until the transaction has been completed,” said Actis in a statement.
It however noted the sale would not affect the running of the firm.
“We would like to reassure our customers, employees, shareholders and the general public that the proposed transaction will not impact adversely on the operations of Umeme or its commitments under its respective licences and agreements,” said the statement.
By the close of Monday’s trading, Umeme’s market capitalisation stood at Sh21.1 billion meaning its stake was valued at Sh12.7 billion.
It is unclear whether the other shareholders will benefit from the sale courtesy of a premium on the Sh13 closing price before suspension of trading.
“It will depend on whether it is them (Actis) who are selling or someone wants to buy,” said Johnson Nderi, advisory and corporate finance manager at ABC Capital.
Actis will be selling a stake in the utility company for the second time in less than two years. It first invested in Umeme in 2005.
The first sale was during the November 2012 initial public offer (IPO) when it offloaded a 39.92 stake on USE. The shares were cross-listed on NSE a month later.
The private equity firm typically invests in or buys out companies at the growth stage.
A typical investment is sized at between $30 million (Sh2.6 billion) and $300 million (Sh26 billion) for a period of between three and seven years.
Locally, Actis has invested in real estate, energy and the services sector. Its latest investment was a 36 per cent purchase in AutoXpress in February, a company that sells and services car tyres, wheels, batteries and suspension parts. The deal amount was not disclosed.
Other investments include the $250 million (Sh22 billion) Garden City Mall which on completion will be the largest shopping mall in East and Central Africa.
The firm is developing the second phase of the Nairobi Business Park consisting of commercial office space.
In the energy sector, the private equity fund is a majority shareholder in Tsavo Power, a 74-megawatt diesel-fired plant in Mombasa.
PE firms have minted billions of shillings in Kenya through investing in fledgling firms and exiting on maturity of investment upon which they go for the next promising investment.
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