MTN, CIPLA to list on USE

MTN, CIPLA to list on USE

Kampala- Drug maker CIPLA-Quality Chemicals Industries plans to list on the Uganda Securities Exchange in the next four months, The East African reports.

This will end the six-year initial public offering (IPO) drought at the USE. The exchange last had an IPO in 2012 when Umeme floated shares.

Telecommunications giant MTN is also exploring ways to give Ugandans a share of its business, but is said to be still working on the best model.

According to documents seen by The East African, Nairobi-based Renaissance Capital has been appointed as the lead transaction advisor for the CIPLA IPO, while Crested Capital is the lead sponsoring broker.

Both firms were unavailable for comment, but sources within Capital Markets Authority confirmed that CIPLA had submitted an application that is currently under review.

CIPLA chief executive Nevin Bradford declined to discuss the reports.

The company is understood to be engaged in book-building ahead of an announcement in the coming weeks.
“It is really a question of when; they are testing the appetite of the market for the IPO and speaking to prospective investors. This is meant to help them firm up a few aspects of the prospectus,” an industry source told The East African.

The company had initially toyed with placing its IPO on the Nairobi Stock Exchange, but settled on Kampala because the shilling is its primary trading currency and listing in Nairobi could have added unnecessary complications.

The East African also has it on good authority that MTN, whose licence renewal is pending approval, plans to open its shareholding to Ugandans.

According to a source, MTN is looking at a phased opening with the first stage ensuring that Ugandans who have grown with the company get meaningful participation before opening up to the rest of the market.
MTN apparently prefers a phased approach under which it would first bring Ugandan pension funds on board through a private share offer, before eventually opening up through an IPO.

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