Uda eyes over Sh200bn in listing at DSE

Dar es Salaam. Dar es Salaam commuter transport company Uda, plans to raise at least Sh200 billion when it lists on the Dar es Salaam Stock Exchange (DSE).

Mr Robert Kisena, chairman and CEO of Simon Group, which has a controlling stake in Uda, told The Citizen in Dar es Salaam on Wednesday that the money would help the company with preparations for the second and third phases of the Dar es Salaam Rapid Transit (Dart) project.

“With it we will be able to buy more buses and do other tasks associated with preparations for the second and third phases of Dart,” Mr Kisena said.

The first phase of the project – expected to kick off toward the end of this year – includes construction of 20.9 kilometres of bus ways from Kimara to Kivukoni, Fire to Kariakoo-Gerezani and part of Kawawa Road from Magomeni to the Morocco junction, as well as 27 stations, five terminals and two bus depots.

Mr Kisena said Enterprise Growth Market Advisors (EGMA), one of the four companies that have been licensed as nominated advisers (Nomads) for firms seeking to list under DSE’s Enterprises Growth Market (EGM), is currently assessing Uda’s potential for listing.

Uda is seeking to list on the main segment of the 18-year-old stock market.

If everything goes according to plan, said Mr Kisena, Uda should be able to issue an IPO in either January or February, next year.

The listing is expected to provide a lasting solution to persistent wrangles over ownership of the once state-owned company. Some quarters, mainly politicians, have questioned the firm’s privatisation.

But Mr Kisena reiterated on Wednesday that the controversy was based on misinformation on what transpired during that time.

He said the 52 unallocated shares for Uda were sold in a “clean” deal while the other 20 per cent – which was sold later to bring Simon Group’s stake to 72 per cent – was also acquired in an agreement that was aboveboard.

The listing is thus meant to bring Uda back to the public. “We envisage offloading 20 per cent to the public via an IPO while another 20 per cent will be sold to daladala owners,” he said.

With time, Simon Group may decide to offload more and more shares. “Even if we are to remain with 30 per cent of shares, we will still be having a controlling stake since the other 70 per cent will be in the hands of individuals,” he said.

The MoU, signed between Simon Group and daladala owners earlier this week, said Mr Kisena, is a clear testimony of how the company wants to bring every stakeholder aboard the running of commuter business in the commercial capital.

Under the MoU, daladala owners have joined Uda in bidding to provide transport services in the first phase of Dart.

Once Uda wins the tender, it will compensate commuter buses that will stop providing services on Morogoro Road to pave the way for special buses to operate on the Dart infrastructure.

According to Mr Kisena, this compensation will be in such a way that Uda will buy all the daladalas that operate in the routes that will be affected by the project.

“Having bought the buses, we will then deploy them into other regions and Daladala operators can then use the money – sourced through the deal – to buy shares in Uda when we float the IPO next year….that is how they will own a 20 per cent stake in Uda,” he said.

Before the end of next week, Uda will have found a consultant to conduct a concrete validation of the buses that ply Morogoro Road and its environs.

It is estimated that some 1,800 daladalas ply the routes. “This number is based on data we collected from Sumatra [the Surface and Marine Transport Regulatory Authority] so we need an auditor – to be chosen between PwC, Ernst & Young and KPMG – to validate and evaluate the market value of the buses before we buy them from the owners,” he said.

Currently, Uda owns 355 buses of which some 255 are already plying various routes in the city while the remaining 100 are at the yard awaiting clearance from relevant authorities.

The company employs some 1,300 people.