TRIPOLI, Libya, March 7, 2017 /PRNewswire/ --
LPTIC, the Majority Shareholder in UTL, holding a 69% stake in UTL and ultimately owned by the Libyan Post, Telecommunications & IT Holding Company, decided on Friday, 24 February 2017, to cease all further funding and investment in UTL. This was officially communicated to the Government of Uganda on Saturday, 25 February 2017.
The decision to cease funding was not made lightly. It followed 14 months of intense engagement with the Government of Uganda to seek to agree on the terms of a Transformation Business Plan for UTL, which included an indispensable funding offer from the Majority Shareholder. While these negotiations were ongoing, the Majority Shareholder continued to fund the substantial amount of working capital being incurred by UTL on a month-by-month basis. This was done to ensure that employee salaries and essential creditors could be paid and the business continue to operate in spite of making no sufficient operating profits partly due to the substantial amount of unpaid debt owed by the Government of Uganda for services provided to support the country's services and infrastructure.
Despite every effort by the Majority Shareholder to save UTL, and in addition to its readiness to fund the implementation of a Transformation Business Plan, it was not possible to conclude negotiations with the Government of Uganda. In straightforward terms, the process could not continue in the face of a protracted lack of substantive engagement from senior stakeholders within the Government of Uganda.
Therefore, given the institutional unwillingness of the Government of Uganda to commit to a transformation plan for UTL in addition to its lack of contributions, the Majority Shareholder, as a responsible investor ultimately accountable to its Libyan Government stakeholders, had no choice but to cease further funding of UTL.
Moving forward and notwithstanding the decision to discontinue funding UTL, the Majority Shareholder expects the Government of Uganda to fully comply with applicable laws and best practice concerning the protection of its investment interests in UTL, including with respect to its rights as UTL's largest creditor. As a Majority Shareholder, the Libyan Post, Telecommunications & IT Holding Company will contest any plans or efforts to undermine its position.