Trading in Umeme Ltd shares at the Uganda Securities Exchange has been “voluntarily” suspended for at least two weeks over the ongoing transition process.
March 31, 2025, marks the end of the 20-year electricity and distribution concession held by Umeme, and the company hands over the assets back to Uganda Electricity Distribution Company Ltd (UEDCL), which commences operations on the network on April 1.
Umeme is listed on the main investment market segment of the USE, where it has been one of the best-performing counters. It is also cross-listed on the Nairobi Stock Exchange. Its exit from the electricity market has caused uncertainties not only within the electricity user community but also the shareholders, who are not sure about the fate of their investment.
Umeme’s major shareholders include the National Social Security Fund (NSSF), which is the largest with a 23.34 per cent stake, Allan Gray (Pty) Ltd with 14.82 per cent, and The Rock Creek Group LP with 8.902 per cent. ICM Investment Management Ltd holds 8.313 per cent, while the rest is held by smaller institutional and retail investors.
Ugandan investors hold 39.2 per cent and foreign investors 60.8 per cent of the 1,624,278,005 shares. The Umeme shareholder register shows that 1,475 large investors hold 99.33 per cent of the shares, while 5,068 smaller ones collectively own a stake of 0.68 per cent.
“The involuntary suspension of the counter by the USE is made in the interest of investor protection and maintaining transparency of the market,” says USE, adding, “The suspension is based on the ongoing public speculations regarding the end of the Umeme concession and determination of the final buyout amount.”
A controversy has been simmering over the last five years since the government indicated its intention not to renew the concession, and the thousands of shareholders started questioning what happens when the only business of the company is lost.
Assurances that they would benefit from the government buyout (compensation for the Investments made by the company but not yet recouped at the time of the end of the concession) were not enough to calm the fears.
The worries were made worse following the ongoing disagreements between Umeme and the government, with the former claiming $234 million (about Shs 856 billion) while the latter, based on the Auditor General’s assessment, decided on $118.3 million (Shs 433.4 billion).
