Tourism

Insights into Bamburi Cement’s Acquisition and Financial Performance in Uganda

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  • He explained that mergers and acquisitions in Uganda are subject to a 30 percent capital gains tax, one percent stamp duty based on transaction value, and advisory fees.
  • Regarding the business landscape in Uganda, Allan Lwetabe, Investments Director at the Deposit Protection Fund of Uganda, noted that the manufacturing sector faces fewer regulatory hurdles compared to the telecommunications industry.

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Under the agreement, Himcem Holdings, Cementia Holding AG, Sarrai Group, and Rwimi Holdings collectively purchased the entire issued share capital of Hima Cement from Himcem Holdings Ltd, representing a 70 percent stake, equivalent to 1,335,600 shares. Cementia Holding AG acquired the remaining 30 percent shares. The total acquisition cost, as disclosed in a prior corporate announcement by Bamburi Cement, amounted to $120 million.

Despite optimistic projections for substantial returns from the sale of its Ugandan subsidiary, Bamburi Cement Ltd recorded a net loss of $2.9 million last year. This was attributed to one-time taxation expenses and legal settlement costs associated with the sale of Hima Cement Uganda Ltd.

Bamburi’s overall turnover increased by 6.3 percent to Ksh22 billion ($162 million) by the end of December 2023, with operating profits rising by 48.3 percent to Ksh1 billion ($7.4 million) during the same period. Operating expenses grew by 3.9 percent to Ksh20.8 billion ($153 million), while net finance income reached Ksh38 million ($280,008) for the period.

Losses from the discontinued operations of Hima Cement totaled Ksh1.1 billion ($8 million) last year. Regarding the business landscape in Uganda, Allan Lwetabe, Investments Director at the Deposit Protection Fund of Uganda, noted that the manufacturing sector faces fewer regulatory hurdles compared to the telecommunications industry. He explained that mergers and acquisitions in Uganda are subject to a 30 percent capital gains tax, one percent stamp duty based on transaction value, and advisory fees.

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Furthermore, Lwetabe highlighted the impact of political events on investor sentiment, stating that recent political developments have diverted attention from pursuing new mergers and acquisitions to monitoring transitional activities. He emphasized that such deals are also subject to Value Added Tax (VAT), capital gains tax, and stamp duty.

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