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Libya Battles to Control Its Last Sub-Saharan Telecoms Stake – Bloomberg

Libya Battles to Control Its Last Sub-Saharan Telecoms Stake – Bloomberg

Libya, which has lost control of its stakes in nine telecommunications companies in sub-Saharan Africa since the 2011 overthrow of Muammar Qaddafi, is battling to save its last one.

State-owned Libyan Post Telecommunications & Information Technology Co. in February ceased all funding and investment in fixed-line, mobile and internet provider Uganda Telecom Ltd. The Tripoli-based company has accused the East African nation’s revenue authority of seizing funds in UTL’s bank account and said it had lost confidence in the government’s ability to pass a $48-million turnaround plan that LPTIC was willing to fund.

LPTIC has called for an emergency shareholder meeting to discuss its 69 percent stake in the Ugandan provider into which it says Libyans invested more than $250 million since 2007. The remaining stake is held by Uganda’s government.

“We’re concerned about nationalization. Unauthorized sale of our shares,” Chairman Faisel Gergab said by phone. Ugandan Finance Minister Matia Kasaija said his ministry has taken over management of UTL after it was “divorced by our partners.” The government hired PricewaterhouseCoopers LLP to audit the company and will take actions on UTL based on the findings, he said.

The uprising in Libya six years ago saw the North African country descend into turmoil and precipitated the unraveling of telecommunications interests across the continent that LPTIC says totaled more than $1 billion. Among them, Libyan stakes in Zambian and Nigerien providers were nationalized, assets liquidated in Rwanda and Ivory Coast, and a Togo agreement was probed for fraud.

‘No Plan’

Such assets were “just left to run themselves,” said Abdulla Boulsien, a former director of Libya’s pan-African telecoms portfolio LAP Green Network. “The reason these assets started crumbling was because there was no plan in the first place, then the Libyan revolution happened.”

The telecommunications dispute is emblematic of broader challenges in Libya, where fights between rival governments, feuding militias and a perennial Islamist threat has crippled state institutions. Libya still holds interests in sub-Saharan Africa, including 11 hotels in locations such as Kenya and OiLibya gas stations in 17 countries including Mali, Nigeria, Sudan and Ethiopia.

The Ugandan minister, Kasaija, said in a March 23 interview that UTL’s debts total more than 700 billion shillings (about $193 million). Ugandan State Minister for Finance and Privatization Evelyn Anite wasn’t available when Bloomberg called her office three times for subsequent comments. Secretary to the Treasury at the Finance Ministry, Keith Muhakanizi, wasn’t available to comment either.

UTL competes in Uganda with the local units of India’s Bharti Airtel Ltd. and MTN Group Ltd. of South Africa. The country’s telecommunications regulator declined to give rankings or subscriber numbers for UTL, citing “competition.”

Capital Losses

LPTIC’s chairman said UTL owes the Libyan company more than $62 million. The company has written to the Finance Ministry and detailed monthly working capital losses at UTL of as much as $900,000, according to Gergab.

Gergab said that, should LPTIC recall this debt, UTL would be “de facto insolvent.” In a letter shown to Bloomberg by Gergab, Anite told him that UTL’s going-concern status “was entirely dependent on assurances of funding” from LPTIC.

Gergab said delays in the long-standing plan to revise a shareholder agreement and “revamp” UTL are the root cause of the dispute. Ugandan authorities have said the turnaround agreement was pending clearance by the country’s attorney-general, and requested “emergency stop-gap funding” of $3 million for “crucial operations” to avoid disruptions, according to correspondence shown by Gergab.

“We will not allow the company to collapse,” Kasaija said, when explaining the government’s intervention.

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