The government of Uganda is offering to assume UGX500 billion (USD133 million) worth of debt owed by state-backed fixed and mobile operator Uganda Telecom Limited (UTL) in order to get its privatisation process back on track. A search for a strategic investor was thought to have been successful last October when Teleology Holdings of Nigeria was named as the winner with an offer of USD71 million for a 67% stake. In February this year, however, the government confirmed that Teleology had been unable to meet its financial commitments and the sale process was suspended.
The hunt for a new investor has now been restarted and The Observer cites an unnamed source as saying that the government has created ‘incentives to make the company more attractive’. They include managing UTL’s backbone network, wiping all the liabilities off the balance sheet, and the government assuming responsibility for the pension liability of more than UGX30 billion to former UTL employees. Other liabilities that the government would take care of include the regulator’s fees and taxes.