KAMPALA May 19 British-based private equity firm Actis said on Monday it had sold part of its Ugandan subsidiary's stake in local power distributor Umeme Ltd for $85.5 million to institutional investors.
"Actis ... today announced the successful sale of a substantial stake of Ugandan electricity distributor, Umeme Ltd, for $85.5 million," Actis said in a statement.
The shares were bought by more than 20 institutional investors in a heavily oversubscribed secondary offer on the Uganda Securities Exchange (USE) and the Nairobi Stock Exchange (NSE), according to the statement. Umeme Ltd has a cross-listing in Kenya.
Uganda's state-run pension fund, National Social Security Fund (NSSF), and South Africa's Investec Asset Management were now the leading institutional investors in Umeme, Actis said.
Actis' Ugandan subsidiary, Umeme Holdings, had said in early May that it was selling 45.1 percent out of the 60.08 percent stake it owned in the utility.
Actis said in its statement that it planned to hold its remaining minority stake in Umeme for at least two years.
Umeme Ltd has a 25-year power distribution concession in Uganda although a parliamentary report in March asked the government to cancel the contract because of the alleged skewed nature of its contract and poor performance.
Umeme has said it doesn't expect the government to act on the parliamentary resolution and says it has met all its contractual obligations.
"By divesting the Umeme shares to such credible investors, Actis is further enhancing the energy sectors," the statement quoted Uganda's energy ministry permanent secretary, Kabagambe Kalisa, as saying.
Umeme reported an 89 percent rise in pretax profits last year, to 115.2 billion Ugandan shillings. (Reporting by Elias Biryabarema; Editing by George Obulutsa and Susan Fenton)