Three international investment funds increased their stake in power distributor Umeme over a twelve-month period, according to the company’s latest annual report.
Allan Gray, Utilico Emerging Markets Limited and Imara S P Reid (Pty) Ltd bought 46.1 million, 45.6m and 20.6m additional Umeme shares respectively between 2018 and 2019. This saw their shareholding increase correspondingly from 9.97 per cent to 12.81 per cent, 4.95 per cent to 7.76 per cent and 4.10 per cent to 5.37 per cent.
Over the same period, shareholders in the “Others” category shed 5.01 per cent of their shares while the Africa Emerging Markets Fund reduced its slice in Umeme by 1.25 per cent.
Investec Asset Management Africa reduced its shareholding by 0.63 per cent. One plausible explanation why some shareholders sold some of their shares is that they needed cash to meet some financial demands on them.
Still, the National Social Security Fund (NSSF), with a 23.24 per cent stake, remains the single largest shareholder in the company even though it did not buy more shares ‘on the block’ over the same period.
In nominal terms, NSSF owns 377,426,009 million of the 1,623,878,005 shares in Umeme. Besides NSSF, the entities that maintained their shareholding at 2018 levels are Kimberlite Frontier Africa Master Fund – 8.9 per cent, the International Finance Corporation (IFC) – 2.78 per cent and Duet Fund 2.45 per cent.
Umeme is in its sixteenth year of its 20-year concession to distribute power in Uganda. From 2005 to 2019, it invested up to $654 million (Shs 2.3 trillion) in the power distribution network, expanding the grid, increasing the connection levels by over 1.2 million, reducing energy losses from 38 per cent to 16.4 per cent while increasing collections for energy billed from lows of 80 per cent to 100 per cent.
The government has since said it will extend Umeme’s concession and the two parties have now agreed on the talking points, according to the company’s board chairperson, Patrick Bitature.
“The government has received us warmly and negotiations have begun in earnest. Areas of discussion include the tenure of the next concession, technical losses, collection rate and rate of return on return,” Bitature said during Umeme’s 2020 annual general meeting recently.
At the same event, Selestino Babungi, Umeme’s managing director, said the company would look at the financing to support long-term capital expenditure and further upgrade to the distribution network.
mugenarose@gmail.com
