Tripoli, 28 May 2012:
Libya has regained full control of its investments in Uganda’s main telecoms provider, Uganda Telecom Limited, (UTL) after $10 . . .[restrict]million debts to two local rival mobile operators were settled.
LAP GreenN, the telecommunications investment arm of the Libyan Investment Authority, has interests in the Ivory Coast and South Sudan as well as Uganda and Zambia. The Libyan investor owns a 69 percent stake in UTL, as a result of a $200 million investment made in 2007. The Ugandan government holds the remaining equity.
As part of UN resolution 1973, LAP GreenN’s Ugandan investment was frozen and administered by the government, which from March 2011, also assumed operational management. As with the Libyan-owned Tropical Bank in Uganda, also taken over by the government at that time, customers were lost and debts allowed to accumulate.
UTL had been taken to court in Kampala by mobile rivals Airtel Uganda and MTN over outstanding inter-connection fees. Airtel was owed $3.63 million and MTN $6 million. Both telcos have now been paid. However MTN is also claiming a further $8 billion in inter-connection fees between 2007 and 2010, a figure that is disputed by UTL. It is understood that as a condition of its re-assuming full management and operational control of its Ugandan investment, LAP GreenN has injected fresh funds into UTL.
UTL’s temporary managing director Donald Nyakairu, who has been running the business since it was taken under government control, has said that the telco now wants to raise its subscriber base from 1.6 million to 2.2 million and is preparing to expand its infrastructure with investments of up to $60 million.
The Ugandan settlement is good news for LAP GreenN, which has been hard-pressed with one of its other major investments. The Zambian government has nationalised LAP GreenN’s 75 percent investment in the country’s main provider Zamtel, claiming the 2010 sale by the then government was fraudulent. The issue has gone to the Zambian High Court. Zambia has so far refused to offer compensation and the Libyan side is seeking $480 million in compensation.
Overall Libya has some $400 million of investments in Uganda. Besides UTL and Tropical Bank, these include Uganda Pharmaceuticals and drug trader House of Dawda, National Housing an Construction Corporation, the Lake Victoria Hotel, Entebe and the Soluble Coffee Corporation, which has yet to be built.