Wednesday , November 30 2022
Home / Business / Uganda Telecommunications Corporation Limited unveiled

Uganda Telecommunications Corporation Limited unveiled

Anite (left) received the assets on behalf of the government of Uganda.

Former Uganda telecom Limited officially metamorphoses into UTCL, all staff to be retained

Kampala, Uganda | THE INDEPENDENT | On Nov.18, Uganda telecom Limited ceased to exist officially as the old administration handed over the assets and businesses to the newly formed Uganda Telecommunications Corporation Limited (UTCL) in the presence of Evelyn Anite, the state minister of finance for investment and privatization.

Held at Telephone House – Uganda Telecom Limited Headquarters in the middle of Kampala, majority of the company’s staff were present to listen to Anite promising them that they would not be fired by the new management.

Anite said, “I speak about UTL off head”.  She revealed that, earlier in 2017 when Libyan shareholders pulled out of the company citing underperformance, an independent survey was conducted by PWC and results discouraged her from keeping the company in operation. She did not give up.

Around the same time, she explained that President Yoweri Museveni directed her together with the senior team at the ministry of finance to save the company.

She approached private sector players including Kirwowa Kiwanuka (before being appointed Attorney General), Patrick Bitature and Morrison Rwakakamba who advised her to stop liquidation of the company and opt for ways to keep it alive.

Together with her senior team, Anite appointed Ruth Sebatindira, a Ugandan corporate and tax lawyer effective January 2020 as the Administrator of Uganda Telecom Limited, replacing the old administration that had been put in place three years earlier.

Sebatindira kept the company ‘breathing’ until November 18, 2022 when the transfer of assets was effected in Kampala.

“We said we must not cause unemployment; but we also needed a national telecom company,” Anite said as employees gave her an applause.

She however said that all the current 230 employees would be given six months to work before their contracts are renewed based on performance.

The government drew Shs315bn from the consolidated fund to buy the assets of the company to keep it as a going concern.

According to the new terms, Anite said, whoever owes UTL money should demand UTL and not UTCL.

As of Nov.18, the company (UTL) had Ushs1tn as debt and Shs250bn as assets. It was recording Shs3bn as average gross revenue monthly against Shs4.5bn in operating costs – monthly. It had 317 sites/masts countrywide out of 472 being non-profitable, and of course a total of 230 employees.

The deal

On Feb.23 this year, the administrator (Sebatindira) executed an asset sale and purchase agreement with the UTCL at a consolidation of Shs256bn; the sums would be applied towards some of the liabilities that is; the Trade Development Bank loan, WIOCC investment, pension (Uganda Communications Employees Contributory Pension Scheme) and NSSF, plus administration debts.

The last payment under the agreement is expected by the end of June 2023. Payment of pre-administration debts is in accordance with the ranking provided under the insolvency laws.

Meanwhile, the administration has been extended by court for only eight months with effect from November 2, 2022 to June 2023 for only residual matters and to receive amounts that remain unpaid under the asset sale and purchase agreement.

Once the sums have been paid in accordance with the agreement, the administrator will report to court and seek that the administration be terminated.

New lady on top

Maggie Mukiibi Lutwama was recently appointed as Chief Operating Officer until a substantive head is named. Lutwama’s immediate position has been Head of Business Development under IT infrastructure company, Soliton Telmec.

She told The Independent on the sidelines of the event that analyzing the staff performance is top on her agenda. The other is working for the Board’s Vision aligned towards affordability, reliability and secure services for Ugandans.

“We shall also strengthen the partnership that we have with the other infrastructure owners,” she said, adding, “I am not worried about the past perception, because the old ended, we are starting with UTCL – we are not going with any liabilities. We are only starting with the assets.”

Joyce Sebugwaawo, the minister of state for Information Communication Technology said, “This is a big deal to the government and the people of Uganda. It is a good deal because the company falls under a profitable sector in the country.”

Majority of the customers for this company are government ministries, agencies and departments and approx.9% shareholding is reported to be for West Indian Ocean Cable Corporation (WIOCC).


Leave a Reply

Your email address will not be published. Required fields are marked *