Tuesday, March 29, 2011

Uganda Takes Over Libyan-Owned UTL

The Ugandan government has taken over management of troubled Libyan-owned telecommunications company, Uganda Telecom Ltd. (UTL), Uganda's minister of information and communications technology said Tuesday.

As a regulator and a minority shareholder in Uganda Telcom, the government has decided to take over management of the company to safeguard its interests and the interests of its customers, Aggrey Awori said in a telephone interview with Dow Jones Newswires.

"We cannot sit and watch as things get out of hand," he said.

Click here to find out more!The Libyan Arab Portfolio, or LAP Green Network, holds a controlling stake in Uganda Telecom.

According to Awori, the move is part of government's decision to implement the United Nations-initiated sanctions against Libya. Last week, the Ugandan central bank took over Libya-owned Tropical African Bank.

Uganda Telecom has been struggling to meet payment obligations to other Ugandan telecom companies arising from interconnection fees. A company spokesman couldn't return calls seeking comment immediately.

Earlier this month, MTN Uganda--a unit of Johannesburg-listed MTN Group Ltd. threatened to block calls to Uganda Telecom over a 20 billion Ugandan shillings ($8.3 million) unpaid interconnection fees that have accumulated over a three-year period.

Airtel Uganda Ltd. also claims that Uganda Telecom owes it UGX8 billion in interconnection fees and had also threatened to terminate calls to the network. Airtel Uganda Ltd. is a unit of India-based Bharti Airtel Ltd.

However, government has prevailed upon the two companies from blocking calls to Uganda Telecom, to avoid inconveniencing the public. People familiar with the situation say that the two companies were now planning to attach some of the properties belonging to Uganda Telecom.

Attachment is a legal process by which a court of law, at the request of a creditor, designates specific property owned by the debtor to be transferred to the creditor, or sold for the benefit of the creditor.

Uganda's foreign affairs minister announced last week that government would freeze Libyan assets worth $375 million; other Libyan-owned companies that have been affected by the sanctions include Tamoil East Africa, National & Housing Construction Company, Laico Lake Victoria Hotel and Libya Oil. 
-Dow Jones Newswires

No comments: