Uganda NSSF surges with power

East African Business Week - - FRONT PAGE - BY SAM OKWAKOL

KAMPALA, UGANDA—THE Uganda Na­tional So­cial Se­cu­rity Fund (NSSF) has be­come the ma­jor­ity share­holder at Umeme Lim­ited, the power dis­trib­u­tor, 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 Ugx59.4bil­lion (just over $16 mil­lion) to ac­quire ad­di­tional shares at Umeme and was able to save up to Ushs4.4bil­lion af­ter agree­ing to a dis­counted sale of Ugx488­bil­lion 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 Ugx132­bil­lion from just Ugx81­bil­lion be­fore the re­cent ac­qui­si­tion. This in­vest­ment has de­liv­ered UGX 22.2bil­lion 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 $5.2 mil­lion 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 UGX488 per share.

OP­TI­MISTIC: Byaru­gaba said Umeme is one of the best per­form­ing eq­uity in­vest­ments and one of the best per­form­ing listed com­pa­nies in East Africa.

Newspapers in English

Newspapers from Burundi

© PressReader. All rights reserved.