Wednesday, May 10, 2017

Hundreds set to lose #jobs as UTL goes for liquidation - #Uganda


Government’s desperate efforts last week to save the troubled Uganda Telecom Limited could be watered down today in a make or break meeting with creditors.

The official government receiver and provisional administrator Bemanya Twebaze said the creditors “will be required to decide whether the administration should continue or the company goes into liquidation or winding up”.

A statement issued by Mr Twebaze further siad, “Winding up is a formal process by which the life of a company is brought to an end.” 
The Wednesday meeting will also decide on the fate of hundreds of employees who are set to flock the streets in a new wild-goose-chase-like job hunt.

“This (liquidation) would involve cessation of operations, termination of employment for all staff and suspending contracts with all suppliers and service providers and all assets disposed of one by one,” the statement read.

This signals government’s loss of the battle to creditors, whose attempt last week to liquidate the company was frustrated by President Yoweri Museveni and Minister Evelyn Anite.
To wind or not to wind up the company is a decision for the very creditors who had replaced their Lord’s Prayer with one to have the company liquidated.
Proceeds earned from the sale of the assets, Mr Twebaze said, will be used to pay the creditors who demand billions of shillings from the telecommunication company.
In an apparent warning to the creditors that the value of the assets may after all be diminished, the statement read; “closing down the business would significantly affect the value of the assets and their disposal, can be a very slow and hectic exercise.”

It adds; “It is because of this diminished value that the potential pay out to creditors may be significantly diminished.”
Mr Twebaze did not hide his preference to not liquidate the company altogether, but it appears they are reading from totally different scripts. In a last week press release, Mr Twebaze sought to assure creditors that the company would address their concerns.

Mr Twebaze, in the statement, indicated that “the administration process is intended to achieve the best possible result for the company’s creditors.”
It now seems the centre no longer holds, and President Museveni and Minister Anite’s effort to flow down the drain without useful consequence.

At a recent news conference convened after government successfully placed UTL under receivership, Ms Anite vowed not to allow the company to collapse, accusing some government officials of conniving with creditors to quietly liquidate the company. Ms Anite had said government will not allow the embattled company to collapse, explaining the hurried intention to place the company under receivership, but the new developments won’t leave the minister and government to rest easy.

Cameo Techedge Limited, an Asian-owned private company, had petitioned court to close UTL over a $133, 000 (about Shs484m) liability, a move government thwarted by obtaining the bankruptcy order.
It remains to be seen what the creditors will decide today.
In a recent report, PricewaterhouseCoopers, a UK-based multinational audit firm placed the company’s debt as a humongous Shs700b, although outgoing board member Stephen Kaboyo recently put it at Shs500b.


DAILY MONITOR

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