This means that the government will be responsible for up to 500 billion Shillings of liabilities that UTL had at the time it sunk into administration two years ago. The new investor will only have to invest to overhaul the network because it is obsolete.
Government has offered to waive
all the liabilities held by Uganda Telecom Limited (UTL), as one of the attempts
to attract a buyer for the company. This is according to two people, who are familiar
with the search.
This means that the government will
be responsible for up to 500 billion Shillings of liabilities that UTL had at
the time it sunk into administration two years ago. The new investor will only have to invest to
overhaul the network because it is obsolete.
The government handed UTL to a
Nigerian firm Teleology Holdings GIB Ltd last October, after six months of
scrutinizing several bidders. The investor, who had offered to pay USD 60 million
(225 billion Shillings), jumped out of the deal just after two months.
On Wednesday, April 17, 2019, State
Minister for investment Evelyn Anite said they realized that the deal was given
to fraudsters and the search for genuine investors was on.
// Cue…“What happens…
Cue out…we will not do.”//
Now people involved in the search
say that the government has a packaged the UTL deal in such way that it
attracts serious bidders. “UTL is quite strategic. It appeals to any investor
who is really serious. Someone will pick it up,” said our source.
The source added that the government
had created incentives to make the company more attractive. They include
managing the backbone, wiping all the liabilities off the balance sheet, and
that the government would take responsibility for the pension liability of more
than 30 billion shillings to former UTL employees. Other liabilities that the government
would take care of include the regulator’s fees and taxes.
“All these wipe off the balance
sheet and handed it [UTL] to you, clearly you can start from a clean slate.”
Another attractive offer is that
UTL still runs government business, providing communication services including
mobile network and internet to several agencies. Our source said the investor
will need to immediately upgrade the network from partly 2G and partly 3G to
4G. The investor will also have to address the issue of dropped calls and the
network not going so far.
UTL was formerly under Libyan
Government ownership through UCOM Ltd who owned 69 per cent stake. They pulled
out of the troubled telecom saying the Uganda government did not make concrete
steps, including injection of new capital.
To prevent its liquidation, the
government scrambled and placed the telecom under the administration of
Registrar General Bemanya Twebaze and the search for an investor to buy has
been on since 2017.