Actis sells remaining stake in Umeme through over-subscribed capital markets offering
Actis, a leading growth markets investor, today announced a full exit of its remaining 14.3% stake in Uganda’s principal electricity distribution and supply business, Umeme Ltd, via the Ugandan and Kenyan capital markets.
Actis originally invested in Umeme when it was privatised in 2005 and has now fully exited its stake following a planned phasing of the process. In November 2012, UHL sold 39.9% of its stake in Umeme through an IPO on the USE. The shares offered through the listing were allocated to East African and international institutional investors, retail investors and employees. Actis (through UHL) then sold an additional 45.8% stake in June 2014 bringing UHL’s holding to 14.3%.
Today Actis announced that an over-subscribed block of 12.0% was sold to institutional investors including the Ugandan pension fund NSSF as well as a number of international funds; subsequently, the remaining 2.3% stake was offered to domestic retail investors and management.
After Actis took over the ownership of Umeme, the company went through a period of transformation, ramping up capital investment, reducing losses, recruiting new management and implementing world class ESG procedures. In particular there was a clear necessity for a focus on improving quality of supply, safety standards and revenue collection.
Since Actis’ investment customer connections have more than doubled providing over 800,000 Ugandan households with access to power, and electricity line losses have halved. The company also uses technology including mobile and prepaid metering for customer service improvements and has increased cash collection rates from below 80% in 2005 to 98% in 2015.
David Grylls, a partner at Actis, said: “We are enormously proud of what Umeme has become. Twelve years ago we saw an opportunity for Uganda’s electricity distribution sector to be transformed into a world class enterprise. Through focused capital investment, operational improvements including loss reduction, strong stakeholder relations, particularly with the Government of Uganda, and a deep commitment to safety, environmental, social and governance principles Umeme built what is today a financially sound distribution business with world class management and a clear vision and trajectory for continued success.”