Shareholders Assured as USE Closes Umeme Counter

By Spurb Ernest

Patrick Bitature says the suspension of his company’s counter at the Uganda Securities exchange was expected.

Umeme Limited Board Chairperson, Patrick Bitature says the suspension of his company’s counter at the Uganda Securities exchange was expected. 

He told Uganda Radio Network that there is nothing the company can do with the share when it is what he described as limbo.

Umeme Limited is Uganda’s main electricity distribution company, listed on the Uganda Securities Exchange and cross listed on the Nairobi Securities Exchange. The Company operates a 20 year electricity distribution concession effective 1st March 2005, from the Government of Uganda. 

The company officially handed operatorship of power distribution Uganda Electricity Distribution Company Limited  on Monday.

The Uganda Securities Exchange (USE) on Monday suspended the Umeme limited counter as the power distributor ceases operations in the country’s electricity sector. Umeme Limited has been listed on the main investment market segment on Uganda Security Exchange.     

Batuture said “Because if you shares drop by more than ten percent in one day Use has to suspend the trading. The price may drop or may go up. People don’t know what the amount is. Do you value it based on $118 million? Or wait after the thirty days when we have reconciled” Bitature explained.   

He however explained that suspension of the counter at USE should not alarm the shareholders of the company. “Don’t feel like there is a shock or anything causing alarm. It is very smooth transition. Everyone is doing their job diligently” he said. Umeme has been one of the biggest players at the Uganda Securities Exchange. 

Bitature agreed that the temporary suspension of Umeme will definitely affect the capital markets in Uganda and Kenya.   

“It was one of the most traded shares on the market, people have made a lot of profits. I hope other companies will see and learn from this example” he said. 

He urges the shareholders not to go into panic mode saying the company has the responsibility to give them value for money.  

Meanwhile, Umeme’s Chief Executive Officer, Selestino Babungi explained that whenever there is any major news, the Exchange sometimes suspends if it realizes that the information is likely to distort the operations of the market.

“And that is the decision they have taken because of this transition that is being evaluated from different perspectives” said Babunji, who has been at the helm of Umeme for over ten years.   

The suspension of Umeme on the Security exchange is likely to have a negative effect on the capital market in Uganda and Kenya. A statement from Uganda Securities Exchange said the involuntary suspension of the counter is made in the interest of the investor protection and maintaining transparency in the market.  

“The suspension is on the basis of the ongoing public speculation regarding the end of Umeme concession and the determination of the final buy out amount” said the statement. 

According to the statement, the suspension takes effect Monday 31st March 2025 for a period of two weeks to enable the company address key concerns regarding price sensitive information and to mitigate the potential impact of the end of concession period.   

USE further explained that during the suspension period, the counter shall continue to comply with all the continuous listing obligations applicable to it and that Umeme shall submit a progress report to the Exchange regarding to the current state of affairs of the company and any propose action.        

According to USE, Umeme was incorporated in Uganda as a private limited company on 6th May 2004 and was converted into a public company on 28th June 2012 under the companies Act. 

Umeme is a subsidiary of Umeme Holdings in turn is a subsidiary of Actis Infrastructure 2 LP, an investment fund under the management of Actis, through a holding company in Mauritius, Actis Infrastructure Umeme Limited. 

Umeme took over the districbution system for the distribution and supply of electricity in Uganda from UEDCL under the concession for a period of 20 years commencing 1 March 2005