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Capital Markets

Suspension of Umeme lifted as negotiations conclude

Investors buy Umeme shares during its IPO in 2012. Actis had voluntarily applied to the USE on November 4 for the suspension of trading of the shares. PHOTO | FILE
Investors buy Umeme shares during its IPO in 2012. Actis had voluntarily applied to the USE on November 4 for the suspension of trading of the shares. PHOTO | FILE 

The suspension on trading of Ugandan power firm Umeme’s shares at the Nairobi Securities Exchange (NSE) has been lifted after British PE fund Actis concluded negotiations for the sale of its stake with selected institutional investors.

Trading in the shares has also resumed in the Uganda Stock Exchange (USE), which is the primary listing market of the company, effectively indicating that Actis has concluded its exit from the power firm.

Actis, through its subsidiary Umeme Holdings ltd, had voluntarily applied to the USE on November 4 for the suspension of trading of the shares until November 15 on grounds that the transactions were likely to materially affect the company’s share price.

The approval of the request meant that trading in the shares would also be halted in Nairobi.

“The lifting of the suspension of trading in the shares of Umeme on the USE is necessary to facilitate settlement of transactions in that market. The process of settling the transactions to investors with CDSC accounts in Kenya is ongoing and is expected to be completed shortly and in any event by November 16,” said Umeme in a statement.

At least one institutional investor, Uganda's National Social Security Fund (NSSF), has been revealed as the buyer of a 7.5 per cent stake that takes its holding in Umeme to 23 per cent and makes it the firm’s biggest shareholder.

Actis’ exit from Umeme - where it initially held a 60 per cent stake - has come in two stages, having first sold off a 45.1 per cent stake in June 2014.

In the second and final sale of 14.3 per cent that is being concluded, the firm is selling off a total of 232,214,516 ordinary shares, which at the current market prices at the USE and the NSE would be worth between Sh3.5 billion and Sh3.7 billion.

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