The Libyan Post Telecommunications and IT Holding Company (LPTIC) has cautioned Ugandan government against undermining their position in the Uganda Telecom Limited, UTL.
The company which is the majority shareholder in UTL (69%), in February made a decision to cease all further funding and investment in UTL, after accumulated debts and losses.
The decision was communicated to Ugandan government on February 25th before they ordered resignation of all five of their Libyan representatives on the UTL board of Directors.
The government of Uganda would later announce the takeover of the company’s management and affairs saying although LPTIC is the major shareholder, “their performance since 2007 has been characterized by indebtedness, decline in market share and losses.”
In a March 5th statement, LPTIC clarified that their decision to cease funding followed 14 months of intense engagement with the Government of Uganda seeking to agree on the terms of a Transformation Business Plan for UTL, but the negotiations couldn’t be concluded.
“While these negotiations were ongoing, the Majority Shareholder continued to fund the substantial amount of working capital being incurred by UTL on a month-by-month basis,” the statement reads in part.
“Despite every effort by the Majority Shareholder to save UTL, and in addition to its readiness to fund the implementation of a Transformation Business Plan, it was not possible to conclude negotiations with the Government of Uganda,” the statement further reads.
“Given the institutional unwillingness of the Government of Uganda to commit to a transformation plan for UTL in addition to its lack of contributions, the Majority Share-holder, as a responsible investor ultimately accountable to its Libyan Government stake-holders, had no choice but to cease further funding of UTL.”[related-posts]
LPTIC however says they expect the government of Uganda to fully comply with applicable laws and best practice concerning the protection of their investment interests in UTL with respect to its rights as the largest creditor.
While announcing the takeover, Uganda’s Minister for Finance and Economic Planning Matia Kasaija assured subscribers, stakeholders and the general public that the telecom would continue to operate with full support from the government.
