Uganda’s oldest telecom company Uganda Telecom (UTL) is reportedly in talks with Safaricom for possible acquisition. Safaricom is the largest telecommunication provider in Kenya and have enjoyed the highest growth rate in East and Central Africa. The Libyan Government through LAP Green Networks owns majority stake in UTL and according to our sources (who preferred to stay anonymous), LAP Green is working together with the Ugandan government to search for a potential buyer. LAP Greencom, a subsidiary of Libya African Investment Portfolio (LAP), a company owned by the Government of Libya, owns 69% stock ownership in UTL and is looking to divest it’s shares.
This comes at a time when the telecommunication firm is struggling to survive, having huge financial debts with up to UGX 366 billion in liabilities that threaten to collapse the company. Recently, Uganda Communications Commission (UCC) the telecom regulator wrote to UTL with intention to revoke its license over several issues.
Vodafone in the mix
In May 2000, the Vodafone Group acquired a 40% stake and management responsibility in Safaricom, and this means that in-case this deal gets to see the day of light, we could have Afrimax-Vodafone and UTL-Vodafone (via Safaricom) in Uganda. This could also lead to some sort of merger according to some speculators. Our sources further confirm that the Safaricom -UTL deal is being brokered by none other than the President’s son-in-law, Edwin Karugire of Kiwanuka, and company advocates on behalf of UTL.
As previously reported, UTL’s Chaimran Mr. Kaboyo Stephen insisted that Uganda Telecom is here to stay, despite the regulatory challenges and he further indicated that the shareholders Lap Green and the Government of Uganda are working tirelessly to reverse the company’s fortunes.
Update:
Sources from UTL have contacted us in response to this post and have confirmed that there are no such negotiations between UTL and Safaricom.
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