KAMPALA: Government is back to the drawing board in its search for an investor to manage the highly indebted Uganda Telecom Limited (UTL) after the Financial Intelligence Authority (FIA) disqualified all seven companies that had expressed interest in managing and capitalising the state-owned telecom firm, PML Daily can exclusively report.
President Museveni in April tasked FIA, a government agency established to monitor, investigate, and prevent money laundering in the country, to assess the financial position of the seven companies that emerged out of 17 others, which had bid to manage the government telecom company that is on the brink of collapse over a Sh200 billion debt.
And now, this website has seen an FIA report to the President, indicating that the seven shortlisted companies, which are Bayliss Consortium, Afrinet Kenya Limited, Mauritius Telecom, Teleology Holding Limited, Neubacher Montage LLP, Hamiliton Telecom Limited and Telecel Global, do not have the required finances to capitalize the ailing UTL.
The detailed May 23 report by FIA Executive Director Sydney Asubo to the President indicates that one of the bidders, Teleology Holdings Limited, which has links to Nigerian shareholders, is already struggling to pay a loan of $1.2b which it got from different banks while taking over 9mobile, which is regarded as Nigeria’s fourth largest telecom company.
In the report, FIA also said it did not manage to trace the financial statements of Bayliss Consortium, Neubacher Montage LLP and Afrinet Kenya Limited.
FIA also said it was not able to see records of the financial performance of Telecel Global, a Lebanon-based company, to be able to gauge its financial strength.
Although the FIA report indicated that Mauritius Telecom has a good financial standing, the report insists the money is not enough to run UTL. Mauritius Telecom’s total assets are worth Rs15.6b (about Shs1.7 trillion) and 30 per cent owned by the Mauritius government but government insists this is not yet enough to capitalize UTL.
For years now, government has been struggling to restore the glory of UTL which saw its downfall after a Shs366 billion liability outstripped its total asset base of Shs220 billion, according to an audit report in 2015.
Recently, the President welcomed a partnership with a Chinese company, Xinlan to start manufacturing phones in Uganda. Cabinet has also gifted the National telecom company with an extension of its license by 20 years, especially when it gets a competent investor to upgrade its network.
It was also agreed during the Cabinet meeting that UCC allows UTL to expand its frequency bandwidth so long as it can prove that it will use it efficiently to cover the whole country and provide better quality service.