Cipla Quality Chemicals has started the process to launch an initial public offering (IPO) that will see the company float more than 657 million shares.
The IPO comes after a six-year drought since Umeme (UMEM) listed on the Uganda Securities Exchange (USE) in 2012.
It will bring the number of locally listed companies on USE to nine. Currently, USE has eight locally listed stocks and eight cross-listed companies – all from Kenya.
The company hopes to put on offer more than 657 million shares, through which the public will own a share of Uganda’s largest pharmaceutical firm.
The company is currently owned by a consortium of investors, with Meditab Holdings holding the largest stake (62.3%), Capitalworks Investment Partners (14.4%), TLG Capital, which intends to sell part of its 12.50% stake and Emmanuel Katongole, Cipla Quality Chemicals Chairman and Founding Director who holds 3.6%.
Cipla hopes to hold 51% after the IPO.
Katongole plans to reduce his shareholding to 1.80% after the IPO.
Frederick Mutebi Kitaka and George Baguma are expected to reduce their respective shareholding from the 3.6%.
The government of Uganda in 2010 divested from the drug manufacturer, selling its stake to Cipla Quality Chemicals at a transaction that was valued at about $5 million (Shs18.7b).
Keith Kalyegira, Capital Market Authority Chief Executive Officer said the IPO indicates growing confidence in Uganda’s equity markets, which has afforded the public to own a share of the country’s prime companies.
“The more people believe the more we shall see investor participate. It is a very strong confidence move that Cipla Quality Chemicals has taken,” said Kalyegira.
“Companies are increasingly finding relevant to mobilise cheap resources through the stock exchange instead of resorting to banks, whose interest rates are increasingly becoming volatile,” concludes Kalyegira.