Uganda nets $33,5m in biggest privatisation deal
Business Report, 1 June 2000
Kampala - (Reuters, 1 June 2000) Uganda on Tuesday received $33,5 million for a 51 percent stake in Uganda Telecommunications (UTL) from a German-led consortium, the largest public enterprise sale in the country`s eight-year privatisation process.
A consortium led by Detecon, a subsidiary of Deutsche Telekom, won the bid to buy a majority stake in UTL in February.
"We decided utilities play an important role in attracting investment and felt it crucial to bring in foreign investment on the telecom side," said Gerald Sendaula, the finance minister.
The consortium would be expected to make a significant investment in the company in rolling out 100 000 telephone lines and providing other value added services over the next five years.
"With that kind of rollout we expect to invest an additional $110 million over five years," said Detecon`s Peter Sommer. He said most of the financing would come from the partners in the consortium - the Swiss-based Telcel and Orascom, an Egyptian firm.
Sendaula said proceeds from the sale would go towards paying off government liabilities not taken over by the new owners.
"When the company`s operations are commercially viable, maybe within the next two years, we will offload these to the public on the stock exchange," said Michael Opagi, the privatisation unit director.