Umeme has been informed by its majority shareholder Umeme Holdings Limited (UHL) that it is contemplating a sale of a substantial block of its shares in the Company.
In view of this fact, and in keeping with their obligations under the Uganda Securities Exchange(USE) Listing Rules, the Directors of Umeme Ltd resolved to voluntarily apply the Uganda Securities Exchange to suspend trading of shares until the transaction is concluded and trading in the shares has been suspended for two weeks.
“We would like to reassure our customers, employees, shareholders and the general public that the proposed transaction will not impact adversely in any way on the operations of Umeme or its commitments under its respective licenses and agreements.”
UHL has assured Umeme that the new potential investors will add considerable financial and reputational credibility to Umeme, the sector and to the economy of Uganda. As a result we believe that Umeme will be a stronger and more creditworthy business. Umeme is proud of its engagement with investors who are attracted to businesses with high standards of corporate governance and strong management teams in well-run sectors and growing economies. Due to corporate governance restrictions, Umeme cannot comment further until the transaction has been completed.
Umeme, which is listed on both the Kenyan and Ugandan stock exchanges, has recommended a final dividend of Ushs16.8 per share, to be approved by shareholders at the next AGM. The company has this year announced a rise in pre-tax profits of 89%, to Ushs115.2 billion shillings ($45 million), and 12.3% in revenue to Ushs966 billion shillings.
Since 2005, Umeme has invested over US$224m in modernizing its distribution systems, improved the networks performance, introduced education programs on electricity and connected more than 50,000 new customers each year.
Umeme’s growth is indicative of Uganda’s powerful macroeconomic story which is why credible investors are looking for an opportunity like this to invest in the company. With only 14% of the population having access to electricity, new high value shareholders will deepen the capital pool which can only be good news for the energy sector and people of Uganda.
Last year, Umeme secured a US$190m loan facility from The International Finance Corporation (IFC), Standard Chartered Bank (SCB), and Stanbic Bank. The facility was secured to support the Company’s five-year US$440m capital investment program and will be utilized to;
- Strengthen the network in preparation for new generation from Karuma, Isimba and others planned by Government,
- To bring down energy losses,
- To finance the national prepayment meters rollout and,
- Safety improvements and enhancements.