Ugandan drug maker Cipla Quality Chemical Industries Ltd (CiplaQCIL) said on Thursday in a statement that it plans an initial public offering and a listing on the Uganda African Securities Exchange (USE).
The company said each of its shareholders would be selling a minority of their stakes in the Initial Public Offer (IPO) and that the transaction and potential listing had received approval of the Capital Markets Authority (CMA) which regulates the USE.
“The listing has received the relevant approvals required, and the Company will provide further details shortly. Renaissance Capital is acting as the lead transaction advisor and book runner, and Crested Capital (Uganda) is the lead sponsoring stockbroker to the listing,” the statement said.
The company largely owned by India’s pharmaceutical giant Cipla, has a manufacturing plant in the capital city Kampala and will be the 19th security on the USE.
CiplaQCIL manufactures nine branded generic drugs, six of which are antiretroviral (ARV) drugs, one artemisinin-based combination therapy (ACT) drug and hepatitis B and C drugs which it sells mostly in sub-Saharan African countries.
The firm said as part of its growth strategy it, has been evaluating an initial public offering and listing of its issued share capital on Uganda Securities Exchange.
Cipla, according to a statement, will still maintain a majority stake even after the IPO but the firm did not state how much equity would be offered for sale on the USE.
In April last year the company announced it would list 31.1 percent of its stock on the USE in its IPO, having sent documents to CMA for approval.
In November it announced it had appointed a book runner, Kenya’s Renaissance Capital to manage the listing process.
A report in the media said then that the company’s largest stakeholder, Cipla Limited of India, would reduce its shareholding to 51% from the current 62.3% in the IPO.
“Each of the shareholders will be selling a minority of their stakes to enable sufficient free float and liquidity. Cipla Group, represented through a subsidiary, will retain a majority stake,” the Thursday statement said.
Capital Works Investment Management, an institutional investor in the pharma company with a 14.4 percent shareholding, would sell off its stake in the IPO, the report said at the time.
Ugandan shareholders, on the other hand, the report said, would halve their shareholding to 1.8 percent. They include Frederick Mutebi Kitaka, George W Baguma – both executive directors at the company – and Emmanuel Katongole, the executive chairman.
The three were among the six founding investors of the compnay when it started operations in 1997. In 2005 Cipla Limited bought into the company.
Another investor, the private equity firm TLG Capital which has a 12.5 percent stake and is expected to retain its shareholding.
“It is an exciting time for the Uganda capital markets that last had an IPO in 2012 and we applaud CiplaQCIL for taking this important step in its growth story,” said USE’s CEO Paul Bwiso said of the new member that is to give other details in the due course.