Ugandan govt to seek new UTL investor after Nigerian firm fails to raise capital
Wednesday 20 February 2019 | 10:03 CET | News, TELECOMPAPER
The Ugandan government will have to identify a new prospective investor to take over 69 percent of Uganda Telecom (UTL) formerly owned by the Libyan authorities, The Independent reported. The government had selected Nigerian firm Taleology Holdings GIB out of six bidders to take over UTL but it failed to raise the required capital. Taleology had been given until 26 January to raise 10 percent of the USD 70 million to enable it take over the operations of UTL as a majority shareholder, according to officials familiar with the matter.
UTL needs around UGX 255 billion to clear some of the UGX 536 billion debt as well as help it upgrade its network to 4G, especially inthe major towns of Kampala, Entebbe, Gulu, Mbarara, Mbale, Tororo, Busia and Fort Portal. Libyan authorities, through the Libyan Post, Telecommunications & IT Holding Company (LIPTIC), withdrew funding to the company in 2017 citing government’s failure to honour its financing obligations. That triggered the Ugandan government to take full control of its operations as it sought a new investor.
Evelyn Anite, the finance minister in charge of investment and privatisation told The Independent on 05 February that it was taking the matter back to Cabinet for approval to seek a new investor. According to Anite, it was wrong to choose Teleology, and “a waste of time; but it is good to learn a lesson”. She said the Financial Intelligence Authority (FIA) report had identified gaps in the Taleology’s financial and telecommunication capability that made it unfit for the task, but a section of government technocrats approved the deal.
A leaked FIA report to the media in 2018 showed that Mauritius Telecom was the preferred company to buy a majority stake in UTL. Asked whether the company would lose business to its rival industry leaders MTN and Airtel because of the continued confusion, Anite said for as long as she is still serving as minister and Yoweri Museveni serving as President, all possible options will be explored to ensure that the company keeps running until a competent investor is found.