The Uganda National Social Security Fund (NSSF) has become the majority shareholder at Umeme Limited after acquiring 23% of shares in the company.
Umeme Holding Limited, Actis’, which previously controlled majority stake in the company, sold 7.5% of its remaining14.3% stake to NSSF.
The recent acquisition propelled NSSF’s shares in Umeme from 251,951,071 shares to 373,771,921 shares. This subsequently increased NSSF shareholding in Umeme from 15.5% to 23% making it the majority shareholder.
“Our investment in Umeme is in tandem with our commitment to invest in the Uganda economy and support its growth,” Richard Byarugaba, the NSSF, Managing Director said last week.
He said the pension fund spent Ushs59.4billion to acquire additional shares at Umeme and was able to save up to Ushs4.4billion after agreeing to a discounted sale of Ushs488billion per share.
Byarugaba reiterated that the decision to invest was informed by the constitutional mandate of the fund to invest members savings on the local economy, and on profitable ventures that can grow the fund. He said this investment will help spur growth in the local USE market.
Byarugaba said Umeme is one of the best performing equity investments and one of the best performing listed companies in East Africa.
“Umeme enjoys attractive future prospects, making it a key holding in our equity investment portfolio,” Byarugaba said.
He said the company plays a critical role in enabling economic growth and development of Uganda through facilitating access to electricity, noting that, the ever increasing demand for electricity should lead to higher earnings for the company and in return, a good yield on the fund’s investment.
NSSF’s investment in Umeme since IPO has seen the fund grow its net worth to Ushs132billion from just Ushs81billion before the recent acquisition. This investment has delivered Ushs22.2billion and the fund holds 89% of returns in Umeme.
The Managing Director, Umeme Limited, Selestino Babungi said NSSF’s investment in the company is a strong statement of confidence in the company and its management.
“We are proud of the Umeme brand and its ability to attract credible investors due to our high standards of corporate governance, our highly talented team and immense contribution to the growth of the energy sector,” Babungi said.
Babungi said Umeme’s growth is indicative of Uganda’s powerful macroeconomic story, which is why credible investors are looking for an opportunity to invest in the company.
“We would like to reassure our customers, employees, shareholders and the general public that the transaction will not impact in any way on the operations of Umeme or its commitments under its respective licenses and agreements,” Babungi said.
The Chief Executive Officer, USE, Paul Bwiso said the listing of Umeme Limited in 2012, is an important milestone for the exchange as it represented the largest IPO, the first cross listing in USE to NSE and the subsequent considerable activity on the secondary market.
“Umeme Holding Limited’s sequential and responsible divestment of Umeme’s shares has presented a tangible opportunity to create value for money for all shareholders and a broader participation on the exchange,” Bwiso said.
A total of $5.2m worth of Umeme shares are available for public participation in the divesture. Similarly the retail tranche of the recent transaction means that customers can purchase the 37,349,155 available retail shares at a discounted value of Ushs488 per share.