In line with our statutory mandate to judiciously invest NSSF members’ savings, and our Investments Strategy, we have reached an agreement to buy 121,820,850 shares of Umeme Limited from Umeme Holdings Limited at a price of Ushs 488 per share.
This is an additional investment of about Ushs 59.4 billion in Umeme Limited. It effectively increases the Fund`s total stake in the company from 15.5% (251,951,071 shares) to 23% (373,771,921 shares).
At Ushs 488 per share, the Fund obtained a 7% discount given share price of Ushs 525 before suspension of trading, which is Ushs 4.5 billion discount on the total transaction.
This additional investment is in conformity with relevant laws and regulations, and the Fund’s own Investments Policy.
Our investment in Umeme Limited since it listed on the Uganda Securities Exchange has delivered impressive returns to the Fund.
- To date, the Fund has earned Ushs 22.27 billion in dividends since 2012.
- The Fund has enjoyed a holding period return of 89 %, since the IPO in 2012.
- The Fund’s investment cost before this transaction since the IPO in Umeme Limited is Ushs 81.7 billion. The total value of the investment is now worth over Ushs.132.3 billion, based on the share price before suspension of trading.
- Umeme Limited is one of the Fund’s best performing equity investments, and one of the best performing listed companies in East Africa.
Umeme Limited also enjoys attractive future prospects, making it a key holding in our equity investments portfolio.
The investment also fits well with our strategy to diversify our investments portfolio, a key component of our Corporate Strategy to grow the Fund to Ushs 20 trillion by 2025.
It also fits well within our plan to deploy capital in growing areas like the energy sector. Uganda still has one of the lowest electricity consumption per capita levels in the world, with only an estimated 15% of the population having access to electricity.
Umeme Limited also plays a critical role in enabling economic growth and development of Uganda through facilitating access to electricity. The ever increasing demand for electricity should lead to higher earnings for the company, and in turn a good yield on the Fund’s investment.
This additional investment in Umeme Limited confirms the Fund`s commitment to invest in the Ugandan economy. We will also continue to seek viable investment opportunities within the larger East African region to enable us pay a reasonable return to our members.