Uganda Government sells its shares in Kinyara sugar factory
Thursday, 29th September, 2011
Uganda Government on Wednesday concluded the sale of 19% shares in Kinyara Sugar Works Limited to Rai Holdings Limited who are the current majority shareholders in the company.
The process was undertaken in accordance with the Public Enterprises Reform and Divestiture Act, Cap. 9, a statement issued by the finance state Matia Kasaija said.
The 19% shares equivalent to 7,271,512 ordinary shares were offered to Rai Holdings for a consideration of US$ 9.1 Million (United States DollarsNine Million, One Hundred Thousand).
The remaining 30% shares in KSWL will be divested in due course and the process to that effect has commenced.
Rai Holdings has committed to make an initial investment of US$ 55 Million over the first 3 years, Increase sugar production capacity to at least 200,000 tonnes per annum and construct a power plant to generate 35 megawatts of electricity of which 22 megawatts will be sold on the national grid.
The company will also list the 19% shares in KSWL on the Uganda Securities Exchange through an initial public offer (IPO) after a period of 5 years.
The investment by Rai Holdings is expected to save foreign exchange which would have been spent on sugar imports, create more jobs, increase the revenue base and stimulate increased production as well as productivity by the out growers.
The minister explained that the divestiture of KSWL is step by Government in the right direction to finding a lasting and sustainable solution to the current sugar deficit in the country.