Minister reportedly voices concern over holding company’s lack of telco expertise

Private equity firm Teleology Holdings this week successfully acquired Uganda Telecom (UTL) with a bid of 268 billion shillings (US$71 million).

Uganda’s Daily Monitor reported on Monday that Teleology fought off seven rival suitors for the incumbent operator, including Mauritius Telecom and Safaricom Kenya subsidiary Afrinet.

Under the deal, Teleology will take a 67% stake in the operator, while the government – which oversaw the sale process – will retain a minority position.

Teleology made headlines earlier this year when it entered Nigeria. It agreed a $500 million deal to acquire 9mobile, which was known as Etisalat Nigeria until former parent Etisalat missed a $1.2 billion loan repayment, forfeiting its stake. Control of the company passed to its lenders, who then put it up for sale.

According to the Monitor this week, ministers overseeing the UTL sale disagreed over which suitor to pick, even though Teleology’s UGX268 billion bid easily topped second-placed Mauritius Telecom’s UGX167 billion offer.

Uganda’s state investment minister and head of the sale Evelyn Anite was said to prefer Mauritius Telecom, voicing concerns that Teleology lacked the technical expertise and financial clout to run an operator.

However, the government ultimately endorsed Teleology on grounds that picking a lower offer would likely lead to litigation.

In addition, the report claimed that Elizabeth Macheka, widow of late Zimbabwean opposition leader Morgan Tsvangirai, intervened on Teleology’s behalf. Macheka allegedly holds favour among Ugandan political circles thanks to her work to secure medical supplies for the country.