Archive for the 'IPO' Category
October 13th, 2014 by Tom Minney
BRVM in Abidjan (photo: AfricanCapitalMarketsNews.com)
Total Senegal is bringing the first initial public offer (IPO) of shares to the growing Abidjan-based Bourse Regionale des Valeurs Mobilieres (BRVM) since 2010, with shares on sale until November. Parent company Total Outre-Mer is selling 8.9% of the shares in the oil products company , in a share offer that began 8 Oct and closes 7 Nov.
Reuters quotes Odile Sene Kantoussan, chief executive of brokerage company CGF Bourse, based in Dakar, saying: “This operation … consists of the divestment of 290,000 shares held by Total Outre-Mer in Total Senegal’s capital..The shares will be listed on the (BRVM) alongside 22% of the capital representing the stake of minority shareholders, bringing the floating capital on the Bourse to 30.9%. ” The ordinary shares each cost XOF 12,000 (CFA franc) equivalent to USD 23.19, with a minimum subscription of 5 shares, according to this announcement by Compagnie de Gestion Financière (CGF Bourse), which is sponsoring broker and Société de Gestion Intermédiation (SGI) in a syndicate of 20 brokers placing the shares. Initial priority is giving to investors in Senegal before extending across the CFA zone. The shares have XOF 1,000 nominal value according to the information memorandum available here. The transaction value is XOF 3.48 billion ($6.7million).
Total has already listed its Ivory Coast subsidiary among the 37 companies listed on the BRVM which trades securities from 8 nations across the West African region.
According to another news report by Agence Ecofin, Gabriel Fal, Chairman of the BRVM and Edoh Kossi Amenounve, CEO, hosted a ceremony for the offering on 10 Oct. It reports that the BRVM’s market capitalization has soared past XOF6 trillion ($11bn) driven by demand for Sonatel – the previous Senegalese listing in 1998 – and capital increases by subsidiaries of Bank of Africa group.
Gabriel Fal, Chairman of the BRVM (photo: BRVM)
In April Fal was reported to forecast other potential BRVM listings could include Ivorian banks, Banque Internationale pour l’Afrique de l’Ouest en Cote d’Ivoire and Societe Ivoirienne de Banque, 51% owned by Morocco’s Attijariwafa Bank, as well as Matforce, a Senegalese company which provides energy equipment, an insurance company based in Dakar and a Canadian gold mining company operating in Cote d’Ivoire.
After the sale and listing, Total Outre-Mer will own 23.1% and Total Africa Limited will own 46%.
See the CGF Bourse website
for details on the share offer.
August 11th, 2014 by Tom Minney
Arabian Cement IPO on Egyptian Exchange in May was 18x oversubscribed. pic: Tom Minney
Initial public offers (IPOs) on African stock exchanges for the first half of 2014 has raised capital totalling $808.5 million, compared to a total of $757.5m raised throughout 2013. The data show there have been 9 African IPOs in 2014 to 30 June, compared to 18 in 2013 and 10 in 2012 on stock exchanges in Casablanca, Dar es Salaam, Johannesburg, Nigeria and Tunisia when the total raised was $342.6m.
The figures are given in a blog
in the Wall Street Journal
, citing figures from consultant EY.
According to the WSJ blog, domestic and international pension funds and other corporate institutional investors are putting more cash into African markets. It highlights new money from Africa’s fast-growing domestic pension funds and growing confidence in African frontier market equities, quoting Joseph Rohm, portfolio manager at Investec Asset Management: “These are nascent capital markets and they are illiquid markets. But what has been encouraging is that, for the first time in a long time, we are starting to see more capital raisings.”
He attributed the IPO increase to an earlier boom in private-equity investments: “We have known for a long time that the amount of private equity in African markets—and more broadly in frontier markets—is unprecedented and we are starting to see those opportunities coming to public markets.”
Bourse de Tunis saw 2 IPOs in 2012, but this was up to 11 last year and 2014 is also looking strong. WSJ
[ blog cites Slim Feriani, chief executive officer and chief investment officer of Advance Emerging Capital, a Tunisian, who said: “In the next 5 to 10 years we are bound to see more IPOs. As it stands, some of the hidden gems are still in private hands,”
The blog also quotes Razia Khan, head of African region research at Standard Chartered, who said Africa’s IPO activity tends to be concentrated in key markets with most big deals so far in 2014 in North Africa. She added the current listing boom is evidence that the African markets are still recovering from the shock of the financial crisis in 2008: “The IPO activity lagged this recovery in growth—it’s not surprising that we’re seeing a rise, but the scale of it is interesting.”
August 5th, 2014 by Tom Minney
24 July – IPO opens
12 Aug – IPO closes
4 Sept – Share allotment announcement
9 Sept – Self-listing ceremony
The Initial Public Offering (IPO) of the Nairobi Securities Exchange Limited (www.nse.co.ke) is open until 12 August. The NSE is seeking to raise KES 627 million ($7.14m) by selling up to 66,000,000 new shares (some 31% of the equity) at a price of KES 9.50 per share. The offer is open to domestic and international investors.
The IPO will culminate on 9 September with the self listing of the NSE on the Main Investment Market Segment (MIMS), making it Africa’s second security exchange after the Johannesburg Stock Exchange (www.jse.co.za) to demutualize and list itself.
Mr. Henry Rotich, Cabinet Secretary for the National Treasury, said during the IPO launch ceremony on 23 July (see press releases here): “One of the key objectives of the Capital Markets Master Plan is to build on recent market reforms to address regulatory and institutional constraints in order to strengthen market infrastructure, intermediation, oversight and governance standards. The demutualization and self-listing of the NSE form part of the government’s policies to enhance governance standards and facilitate access to our markets by a wider community of investors. “
Mr. Edward Njoroge, NSE Chairman, said: “The success of our country and the region will be mirrored both in our market and our company, the NSE. We urge all Kenyans, and other investors both far and wide, to embrace this offer with the confidence that Kenya’s growth and future success will, in many ways, be accelerated through the development of our capital markets.”
The minimum number of shares available for purchase is 500 at a cost of KES 4,750.00 (approximately $54). Thereafter purchases are in multiples of 100 shares.
The NSE is celebrating its 60th anniversary and the demutualization and share offer have taken 5 years until the Capital Markets Authority approved all in June.
Is the NSE IPO a bargain? Analysis by Ryan Hoover
Ryan Hoover of the excellent Investing in Africa blog (www.investinginafrica.net) has published his analysis of the NSE IPO here, it is well worth reading. He looks at the NSE income and expenses in the prospectus, and shows that transaction levies (fixed at 0.24% of total trade value, i.e. 0.12% on each side) are the main source of income, earning the NSE KES 405m in 2013. He breaks down the baseline earnings to come with an after-tax figure of KES 0.80 per share, giving the offer a price/ earnings (P/E) ratio of 11.8x.
Since Kenyan bonds currently yield around 11% he looks at future earnings, noting that trading volumes are up 37% in the first half of 2014. Using a forecast growth in earnings per share of 20% he believes the shares could be worth KES 19.90 in 2019 at a P/E ratio of 10x (the JSE is on P/E of 16x) and adding in dividends at KES 0.25 per year (the current level adjusted for the IPO) he sees the potential annual return at 17.4%.
Check out his excellent blog, also for the discussion following the article, which points out that the offer is likely to be over-subscribed.
May 14th, 2014 by Tom Minney
The Nairobi Securities Exchange (www.nse.co.ke) is pushing ahead fast with its demutualization plans and will sell up to a 38% stake in an initial public offering (IPO) in June. According to a report on Reuters, NSE chief executive Peter Mwangi said the NSE will offer up to 81 million shares, subject to regulatory approval.
The offer price will be set by the IPO advisors closer to the offer date. The bourse will use the funds for new products and enhance transparency.
Reuters quoted Mwangi saying: “We want to list through an IPO on the main market. We need to open this listing before 30 June. That conversion from a private to a public company will position us to be a very effective player.”
“We are playing in a sweet spot where the frontier funds think Africa is rising. East Africa is a hot spot on the African map and we are the gateway into that east African region.”
Soaring profits, new products
The NSE’s pretax profit more than doubled to KES 379m shillings last year from 2012. It has been lifted by a surge in trading turnover after the 4 Mar 2013 presidential election went peacefully. The dynamic Nairobi exchange is a mutual company owned by its stockbrokers, and demutualization is the process converting into a private for-profit company, as reported on this blog. The ordinary shares have a nominal (par) value of KES 4 shillings ($0.05) each.
Kenya’s Capital Markets Authority is reviewing the exchange’s advanced plans to offer currency and interest-rates futures and options. The NSE futures market will offer standardized contracts for currency futures that will be traded. Mwangi said: “We are seeing more and more international investors who might want to invest in Kenya and they might want to hedge the currency risk.” Local banks offer foreign-exchange forward contracts, which are negotiated directly with buyers, but they cannot be traded.
Mwangi added that part of the funds raised in the IPO will be used to bankroll new products such as derivatives, exchange-traded funds (ETFs) and Sharia-compliant indexes. The NSE has already led the way with a number of FTSE-branded index products and is working with the CMA and CDSC to introduce a real estate investment trust (REIT) market in Kenya and trading platform and a futures and commodities exchange.
The 60-year-old Nairobi stock exchange has been diversifying through new sources of revenue including sales of publications, provision of services through the Broker Back Office (BBO) and data-vending. It bought a prime commercial property in Nairobi’s Westlands area to tap into rental income, according to a report in Standard Digital.
The region is enjoying many benefits from increasing regional integration under the East African Community (EAC). The Nairobi bourse is a key player in the East African Securities Exchange Association (EASEA), which aims to standardize regulations and operations within the region to make cross-border investing easier. Members are the Dar es Salaam Stock Exchange (DSE), the Rwanda Stock Exchange (RSE), the Uganda Securities Exchange (USE), and the Central Depository and Settlement Corporation (CDSC). It also has a memorandum of understanding with the Somalia Stock Exchange Investment Corporation (SSE) under which it will have primary responsibility for the technical development of the Somalia Stock Exchange including identifying the most suitable partners and expertise.
Regional integration has also boosted expansion among listed firms and investor confidence after the discovery large quantities of gas and oil across several east African countries. There are many cross listing between the exchanges.
Mwangi said they wanted to attract more listings on the NSE’s Growth Enterprise Market (GEMS) which is aimed at small firms wishing to list their shares. There is only one listing, property developer Home Afrika so far. The NSE hopes to attract more listings through easier listing terms such as allowing business owners to offer a minimum of 15% if the shares in the market. Mwangi told family business owners who may be reluctant to lose control: “With 85% you have effective control of your company but you enjoy all the advantages of being listed. We are in a sense offering the best of both worlds.”
The NSE is a key member of the African Securities Exchanges Association and an affiliate member of the World Federation of Exchanges (WFE) and intends to become a full member.
May 3rd, 2014 by Tom Minney
The Nairobi Securities Exchange (www.nse.co.ke
) celebrated its 60th annual general meeting by taking key decisions to advance its demutualization into the final stages. It also made record profits for the financial year to 31 Dec 2013 and paid its first dividend to shareholders.
NSE Chairman Eddy Njoroge was one of the directors re-elected at the 60th annual general meeting of the exchange, held last week. He thanked the NSE shareholders for passing key resolutions and said the demutualization process is nearly finished with the next step the NSE doing an initial public offer (IPO) and then listing its shares for trading on itself. According to a press release
, he noted that the Board had appointed Transaction Advisors who are currently working towards the Self-Listing of the Exchange through an IPO on the Main Investment Market Segment (MIMS) of the NSE, before the end of June 2014: “The Capital Markets Authority has received our final application, and we expect formal approval to be granted by the regulator shortly. This will open the door to the long-anticipated self-listing.
“The NSE’s impending demutualization will provide further impetus for the exchange to support the attainment of Vision 2030, further positioning our capital markets as the hub for East and Central Africa. The NSE IPO will enable a wide cross-section of Kenyans to both own a piece of the exchange and to share in the future financial success of this company with a very rich national heritage”.
The NSE had total income of KES 622.7 million ($7.2m), up 62% from the previous year’s KES 384.3m. Net profit soared 210% to KES 263m, up from KES84.8m and the highest in the bourse’s 60-year history. The total value of trading in equities was up 79% to KES 155.8 billion ($1.8bn) from KES86.8 billion and market capitalization was up 50% to KES 1.9 trillion ($22.6bn). The AGM resolved to pay a first dividend of KES 2 per share.
According to another press release, Chief Executive Peter Mwangi said: “Our strong financial performance in 2013 was a result of the very strong market performance and the efforts of management to diversify revenue streams from the traditional sources of transaction levy and annual listing”.
Demutualization – the resolutions
Demutualization is the process through which an exchange stops being a mutual company, often a company limited by guarantee, with the stockbrokers and other stakeholders as members. Instead it turns into a for-profit limited company with shareholders. This can help with management and with capital raising to invest in new technology. The first demutualization was Stockholm Stock Exchange in 1993 and since then most top world exchanges have followed. Some observers ask if for-profit exchanges really work in issuers’ and investors’ interest.
Special resolutions passed at the Nairobi SE AGM were:
1. Subject to approval by the CMA, the share capital is increased from KES 25m (25m x ordinary shares of KES 1 each) to KES 850m by creating 825m new shares which rank pari passu
2. After this, the new 850m shares should be consolidated into 212.5m ordinary shares of KES 4 each.
3. Subject to approval by Registrar of Companies and CMA, the company shall be turned from a private into a public company and new articles of association be adopted, signed and registered.
4. Subject to approval where applicable, part of the credit on the company’s revenue reserve be capitalized value KES 490m to pay in full and at par for 122.5m ordinary shares of KES 4 each. These would be issued as fully paid among the registered shareholders of the company
5. Up to 2.5m ordinary shares of KES 4 each would be offered for subscription to employees of the company.
6. Subject to approval by relevant authorities, up to 212.5m ordinary shares be approved for listing on MIMS. Up to 81.375m ordinary shares should be offered for subscription by the public, and the company will issue a prospectus.
January 31st, 2014 by Tom Minney
pic: Tom Minney
Three new initial public offer (IPO) share flotations with a total value of over $300 million are planned for the Egyptian Exchange (EGX
) this year, says Egypt’s largest investment bank. According to a story on Reuters
, these would be the first listings on the Cairo bourse since the revolution, the last IPO was in 2010.
The Egyptian Exchange has been booming in recent months, after suffering in the political turmoil since Mubarak’s fall in 2011.
Reuters reports that Karim Awad, co-CEO of EFG Hermes
, told financial newspaper Al-Mal
that Egypt’s Arabian Cement Company would be one of the listings but did not name the other two. Awad told Reuters by email: “The IPOs will hopefully happen this year. The exact timing in the year will be agreed with the companies who are undertaking the IPOs and considering the state of the financial markets.”
Egyptian stock market investors have chosen to ignore increasing violence and repression and are focusing instead on the ongoing national economic and political stabilization, particularly since the 14 Jan referendum approving a new constitution and cleared the way for presidential and parliamentary elections. The main EGX 30 Price Return index
of the Egyptian stock exchange is up over 45% since the army ousted Islamist President Mohamed Mursi in July 2013, after mass protests against his rule.
As reported here
, Egypt’s financial regulator the Egyptian Financial Supervisory Authority (EFSA
) will implement new regulations for companies listed on the bourse from tomorrow (1 Feb), which could help boost liquidity and attract listings and further investment.
On 28 Jan, Finance Minister Ahmed Galal said
details of its second stimulus package since Mursi’s ousting would be announced within days. The aim is to boost growth and investment, which had slowed dramatically. Government had done a first stimulus package of EGP30 billion ($4.3bn) last year and promised a second of the same size this month. Gulf countries have pledged more than $12bn in aid since Mursi was overthrown and Galal has said that EGP20bn would go on public investment and the rest would create a new public-sector minimum wage.
Before the 2011 revolution, Egypt was attracting around $8bn a year of foreign direct investment (FDI) but that shrank to $4bn in the year to June 2012 and $3bn to June 2013. Investment Minister Osama Saleh said this week they expect to beat the target of $4bn in FDI by June 2014.
is last week’s Economist
article on Egypt.
January 9th, 2014 by Tom Minney
The listing of Société d’Articles Hygiéniques (SAH), on the Tunis Stock Exchange yesterday (9 Jan) after a private placement and an oversubscribed initial public offer (IPO) is the largest listing on the Tunis bourse (Bourse de Tunis), with the company valued at TND 270.5 million ($163.5m). It is a successful exit for leading African private equity firm Emerging Capital Partners which scored a cash multiple of 2.4x on exiting the investment.
The private placement for 90% of the shares attracted 85 local and international investors, signalling a return by international investors to the Tunisian capital market. The public offer in the Tunisian IPO was over-subscribed 22.1 times, according to a press release. Adel Grar, Chairman of the Tunisian Brokerage House Association, said: “The IPO of SAH is a milestone.. it demonstrates the ability for a local or foreign investor to exit through the Tunis Stock Exchange.”
SAH (www.lilasbebe.com.tn) is Tunisia’s leading manufacturer of feminine and baby hygiene products and operates under the “Lilas” brand. ECP has invested since 2008 and, according to the announcement, “has supported SAH as it increased its customer base to 17 countries across North and sub-Saharan Africa, created subsidiaries in Algeria and Libya, and developed a paper mill factory in Tunisia.” Products include baby diapers, feminine-care pads, disposable diapers, bathroom and facial tissues, kitchen towels, hand towels and tissue wipes.
“Over the last 2 years, SAH has grown at 17% per year, despite a difficult economic climate – testament to its focus on product innovation, diversification and locally produced, high quality offerings. SAH’s sales are expected to exceed TND 200m ($120m) in 2013 and the company currently employs over 2,000 people.” According to a 2011 profile in The Africa Report, also on the ECP website , SAH was founded in 1995 by wife and husband team Jalila Mezni and Mounir el Jaiez.
The sale was of 14,176,590 shares, representing 48.99% of the capital at listing and the fixed offer price of TND 9.35 per share.
Nayel Georges Vidal, Director in the Tunis office at ECP, said in the press release: “Under the guidance of Ms Jalila Mezni, the company has worked hard to more than double its performance over the last 5 years. With ECP’s support, SAH has expanded its production capacity, brought new products to market, expanded beyond Tunisia, and built a strong customer brand – all made possible by its employees’ dedication to improving its systems, governance and product range. We firmly believe that SAH will continue to create further value for its shareholders – which include many foreign investors showing renewed interest in the Tunisian stock market.”
Private equity firm ECP was founded in 2000 and has raised more than US$2bn for growth capital investing in Africa. It was one of the first firms dedicated to Africa and has investments in more than 50 African companies through 7 funds. It boasts “more people on the ground than any other firm” with more than 70% of its investment professionals, who hail from 12 African countries, in 7 local offices.
Its private equity investments include financial services, telecommunications, retail and consumer, natural resources, agriculture and infrastructure in over 40 African countries. In 2013 Africa AM magazine was awarded ECP as “PE Fund of the Year”. Private Equity Africa awarded it for mid-cap “PE Deal of the Year” as reported here, for investment in casual dining chain, Nairobi Java House.
April 18th, 2013 by Tom Minney
The regional forum, the East African Securities Regulatory Authorities (EASRA), is seeking to create a harmonized licensing framework for the region for brokers and dealers, and has also approved draft regulations on book-building for adoption by its members. The draft book-building regulations are to be shared with stakeholders in the member States and their views will be brought to the next EASRA meeting.
Book-building is a process of determining the price at which an initial public offering will be offered. The book is filled with the prices that investors indicate they are willing to pay per share, and when the book is closed, the issue price is determined by an underwriter by analyzing these values.
According to news reports, Joseph Katto, chairman EASRA and CEO of Capital Markets Authority – Uganda, said that book-building can be an effective mechanism for price discovery and demand assessment if regulations are clear and enshrine transparency, The draft regulations would ensure a level playing field for various investor categories.
EASRA also approved a proposal to establish a harmonized licensing requirement framework for stock-brokers and dealers. The proposed framework will guide the drafting of harmonized regulations for licensing within the region.
The decisions were taken during the 37th Consultative meeting held in Kampala, Uganda on 5 April.
EASRA members are also seeking ways to facilitate joint inspection programmes and investigations where two or more member states agree. This would boost cross-border surveillance for market participants who operate across the region..
The meeting was chaired by Katto and was attended by Mrs Nasama Massinda (CEO, Capital Markets and Securities Authority Tanzania), Paul Muthaura (CMA-Kenya), Robert Mathu (CEO CMA-Rwanda), Joseph Bahizi (Representative of Central Bank of Burundi), members of the EASRA technical committees and other Committee members.
EASRA was set up in terms of a memorandum of understanding between the CMAs of Kenya and Uganda, and CMSA Tanzania. They adopted a common blue print on the integration of the East African Capital Markets in 1997. CMA Rwanda later joined and Central Bank of Burundi in 2011.
November 8th, 2012 by Tom Minney
CORRECTION AND UPDATE – APOLOGIES FOR ERRORS IN PREVIOUS VERSION
The Initial Public Offer by power company Umeme (www.umeme.co.ug) in Uganda closed on 7 November. Results will be known before the listing scheduled for 30 November, but the company had sought to raise UGX171 billion ($65.8 million) by offering 622m shares in an offer that opened on 15 October. Meanwhile, Ugandan parliamentarians have called for a statement by the Finance Minister Maria Kiwanuka, according to a press report on the Observer website, with inquiries into tax and accounting for assets. Some MPs are calling for the listing to be delayed for fuller study of an energy sector report.
As the offer was closing, a report in The Independent cited corporate advisor William Nyakatura of African Alliance Brokers, said there has been a big turn up of applications from around the region. Umeme Managing Director Charles Chapman said that the portion of the IPO reserved for international share investors was sold up by the end of October, and where the company collected US$31million: “In the retail category, we received strong participation from the rural areas and Kampala and other urban areas.” Chapman also said that the offer has received significant participation from the regional market, especially Kenya, where the offer is made to institutional investors. Stanbic Bank and African Alliance were sponsors.
Ugandan investors had been offered the Eyongeza incentive scheme offering a bonus share for every 10 shares they bought, and all customers of the distribution firm were invited to buy. A day before closing it was announced that the International Finance Corporation, a part of the World Bank group, would also buy shares in the IPO. The IFC first mentioned funding Umeme in 2009 on its website. Umeme staff have been given 10,000 shares each as a morale booster, according to local reports, with increases if they keep their shares for 3 years.
Umeme was 100% owned by private equity firm Actis since 2009 and is a regulated electricity distribution company in Uganda, supplying over 460,000 customers by the end of 2011, up from nearly 355,000 in 2009, according to our earlier story. They are mainly located in the semi-urban strip from Entebbe through Kampala to Jinja. In March 2005, Umeme was awarded a 20-year concession to manage and operate the assets of Uganda Electricity Distribution Company (UEDCL) as part of broader privatization of power in Uganda, including unbundling transmission, distribution and generation, and awarding concessions to operate existing generation plant. This article on The Observer website (www.observer.ug) gives background on some of the individuals and companies involved in the power sector in Uganda.
According to the Actis website: “Since Actis took over the ownership of Umeme following a privatisation process in 2005, the company went through a transformation phase, ramping up capital expenditure, improving the quality of management, formalising procedures, introducing a culture of safety throughout the organisation, and educating the population (mainly children) on the benefits and risks of electricity. By the end of 2010, Umeme had replaced over 120,000 rotten poles as part of its refurbishment programme. Safety is the top priority. The network restoration plans are on target and are due for completion by the end of 2012. Public, employee and contractor safety have improved, but public fatalities continue to occur, primarily because people come into contact with live conductors associated with pockets of the network yet to be refurbished. Umeme, guided by Actis, continues to make a significant effort to eradicate fatalities associated with its network. Much of this progress relies on an extensive school education programme, a 24-hour safety helpline, and the prompt response of the field teams on the ground – in the past it could take up to half a day to make the area around a fallen or unstable pole safe – now the average is 30 minutes. Uganda’s continued growth is pushing up demand for electricity: today approximately 7% of the population has access to electricity. And the proportion of population that has access is growing by 9% per year. Currently, the company connects more than 40,000 new customers every year.”
July 12th, 2012 by Tom Minney
Uganda’s only power distributor, Umeme, said it plans to raise capital to invest in Uganda’s electricity sector through an initial public offering (IPO) on the Ugandan and Nairobi securities exchanges later in 2012. Umeme is a distribution company and is 100% owned by private equity firm Actis, according to this report on Reuters.
The news came on 6 July at the switching of 5 turbines to add 50MW to the power grid as part of the $860 million Bujagali 250MW hydropower project, one of Africa’s largest power schemes. Umeme has a 20-year electricity distribution concession. Managing director Charles Chapman says the company has opted for the IPO as electricity is now available – Uganda had been suffering power cuts before Bujagali capacity was added – and there was agreement on regulatory targets.
The company would not say how much it hopes to raise and has not finalized plans for the IPO, but Reuters suggests it could be 20% of the shares. The report quotes Chapman: “The initial public offering (IPO) will support Umeme’s capital raising initiatives to finance the continued development of the electricity distribution network, including projects such as prepayment metering and energy loss reduction. We believe that Umeme will be stronger, more transparent and accountable with the input of our customers and employees as shareholders.”
He adds that customers are up to about 460,000 in 2011 from 354,839 in 2009. After power sector unbundling, power in Uganda is generated by the Uganda Electricity Generation Company and transmitted to Umeme by the Uganda Electricity Transmission Company.
According to this blog story, Umeme has already put in its application to the Capital Markets Authority in Uganda and has appointed Stanbic Bank (Uganda) as Transaction Advisor and African Alliance (Uganda) as Sponsoring Broker. Writer Angelo Izama comments: “The company is a safe investment given its monopoly and demand from customers. Many who worry about the risks it faces will look to political risk something to which we will return. Suffice to say that a great degree of the risk will likely be offset when the company lists given the divesting of its ownership to locals.”