Actis seals African electricity exit

The firm bought Uganda-based Umeme in 2005 and will retain a minority stake in the business.

Emerging market specialist Actis has sold a 39 percent stake in Ugandan electricity distributor Umeme for about $86 million, according to a statement.

Actis is exiting the company via a share sale through the Uganda Securities Exchange (USE) and the Nairobi Stock Exchange (NSE). The firm is retaining a 21 percent stake following the divestment, which could be reduced to a 15 percent stake in the next two weeks after an offer to retail investors and Umeme’s directors and management.

Among the 20 investors who bought shares in the company are Investec Asset Management and Uganda’s National Social Security Fund (NSSF), who will join Actis as cornerstone institutional shareholders in Umeme. This transaction is the largest secondary block trade to date on the Uganda Securities Exchange, according to the firm. Actis invested in Umeme in 2005 before cross-listing it on the Uganda Securities and Nairobi Stock Exchange in November 2012.

Umeme is the largest electricity distribution company in Uganda. Under Actis’ ownership, the company has invested over $224 million in modernising its distribution system. By the end of 2013, Umeme had increased its customer base from 250,000 to 584,000. It has a work force of more than 1,300.

Actis is currently investing its its third energy fund, Actis Energy 3, which closed on $1.15 billion last December, above its $750 million target. Actis Energy 3 invests in electricity generation and distribution businesses in Latin America, Africa and Asia. In December, the fund had already deployed $560 million, PEI reported at the time.

The vehicle completed four investments last year, including an investment in Atlantic Energias Renovaveis, a Brazilian renewable energy company, and Aela Energía, a Chilean wind and solar electricity provider. Actis Energy 3 has also agreed to invest in Cameroon’s national integrated utility, Société Nationale d’Electricité, and signed an agreement to acquire Morocco’s water, waste water and electricity services.

Actis is also investing its fourth flagship buyout fund, a $1.7 billion vehicle that held a final close last October.