After two days of protracted closed-door meetings, between the government of Uganda and Lap Green Networks – a Libyan Government investment arm, we finally get to see some positive result in regards to the future of Uganda Telecom (UTL). This means there is a ray of light at the end of the tunnel in regards to the way forward of Uganda’s oldest Telecom firm, as the shareholders approved a cash injection of about $65m (Shs217b) and this investment would revitalize operations of the firm by September 2015.
According to the Daily Monitor, the closed-door meetings included President Museveni, the Libyan Foreign minister, Mr Mohamed Al-Dairi, Uganda’s State minister for Privatisation, Mr Aston Kajara, Mr Wafik Al-Shater, Group chief executive officer of Lap Green and Utl chairman, Mr Stephen Kaboyo. The major focus was to see how to raise money to pull UTL from the over Shs160b debt sinkhole it is currently in. Mr Kaboyo yesterday in a statement.
[signoff icon=”quote-circled”]“UTL is at a critical stage of the business where we have embarked on the process of rehabilitating the business, refocusing our strategy and improving profitability of the company. All the interventions by the shareholders are aimed at creating conditions to reestablish UTL’s credibility as a truly Ugandan brand, repositioning to compete strongly and reclaim our once respectable market share. In terms of UTL cash requirements, let me say that telecoms require a threshold in millions of dollars on a consistent basis to get investment up, rebrand, fully optimise, achieve economies of scale and remain competitive. The business case and financial solution for UTL that mentions $65m is the baseline that will enable us shift into a capitalised turnaround” [/signoff]
The telecom regulator UCC almost revoked UTL’s license over defaulting on several obligations – including non-payment of interconnection fees to MTN and Airtel. The company’s liabilities had also outstripped assets by about Shs 146b with UCC describing it as being in a state of financial collapse.