Umeme opens up for public scrutiny

By Vision Reporter

Umeme is displaying all its official documents pertinent to the initial public offering for the public to inspect and find clarification as they buy shares in the utility company.

The documents for public viewing are at Umeme’s Communication Centre on the First Floor of Rwenzori House in Kampala.

They include the power sales and an amended agreements, relating to the power sales agreement.

Others are the loan agreements, certificate of incorporation and amended memorandum and articles of association.

The documents also include Umeme’s lease and assignment agreement with the Government, lock-in agreement documents, and the company’s support agreement.

Also on display are the share pledge agreement, the share retention agreement, the reimbursement and credit agreement, Umeme’s subordinated deed, and the company’s first rank all-assets debenture.

“The documents have been put on display since October 15 when the IPO was announced to allow for increased transparency to the general public, many of whom have applied to become shareholders in Umeme. We are happy to provide this information and have a team on hand to help explain the document contents where necessary,” said managing director transparency Charles Chapman.

 He said customer queries and applications had increased following the announcement last week that consumers will receive free bonus shares if they indicate their account numbers on their application forms.

“The excitement is growing, more so because the share offer closes soon. More and more people need to take advantage of the window to snap up the remaining shares on offer, and to increase the number of free shares they get,” Chapman said.

Consumers applying for shares will receive free bonus shares worth $2m (about sh5b). The free bonus shares, termed ‘incentive shares’ are being offered to Umeme consumers at a discounted rate.

Share applicants who indicate that they are consumers of Umeme will receive one free share for every 10 they apply for. The free shares are being granted to all consumers who provide a valid customer number.

The number of incentive shares to be allocated to consumers will be based on the number of Umeme shares that they are able to buy at the end of the offer period.

The offer closes on November 7, the same day the IPO closes. Each applicant is limited to a maximum of 100,000 incentive shares. Umeme is floating 622,378,000 shares in their long-anticipated IPO, which is 38.3% of the company’s issued share capital upon listing.

The IPO targets East African retail customers with 20% of the shares, qualified institutional investors in EAC with 25%, and international investors with 46%. Umeme employees have been allocated 9% of the shares.

Funds raised will be used to reduce the company’s debt and enable Umeme secure better financing options to finance its capital investment programme. Over sh170b will be raised through the IPO.

Umeme 2011 annual report reflected a 45% growth in earnings before interest taxation depreciation and amortisation.