UGANDA’S UTL LISTS SHS 30BN BOND TO FUND EXPANSION PLAN

Mergers, Acquisitions and Financial Results

Uganda telecom limited (utl) has issued a Shs 30bn bond due in 2008, says utl boss Aimable Mpore. This is part of its Shs 54bn Medium Term Note Programme (total bond to be issued). The remaining Shs 24billion Medium Term Notes (bond) will be issued during the next 12 months.

The offer that opened July 10 will close July 28,2003. Utl will use proceeds from the bond for infrastructure development. Mr Andrew Owiny, the executive director of MBEA Brokerage Services (Uganda) Limited, the dealer and sponsoring broker of the programme, told The Monitor that interest on the issued notes will start to accrue July 30.

He said the bond would thereafter be listed on the Uganda Securities Exchange (USE) during the first half of August 2003. The Capital Markets Authority and the USE have approved the listing. The utl bond becomes the 4th to be listed on the USE after the PTA bank’s $10million, East African Development Bank’s $10 million and MTN Uganda’s Shs 12.5 billion.

The move brings in more activity on the USE’s bond market , which has recorded no trading in the last fiscal year as bondholders who are institutions hold onto their investments in anticipation of attractive returns. "The notes will be issued in denominations of Shs. 10 million at an interest of 1.65 percent above the most recent 182 day treasury bill issued and published by the Bank of Uganda, prior to the date which is 5 business days prior to interest payment dates," he added.

Interest will be payable semi-annually in arrears on January 30 and July 30 of each year, with the first payment due on January 30, 2004. The principal is also payable semi-annually in equal installments on 30th of January and 30th of July each year, with the first payment due on January 30, 2005, after an 18-month grace period.

"Utl is to use the proceeds of the Notes issued under the programme to improve and increase capacity on cellular network coverage in rural areas, expand and rehabilitate landline network and subscriber base by installing additional lines necessary to connect new subscribers and build countrywide data network," Owiny said.

The company also intends to use the money to upgrade civil infrastructure, transport and IT facilities and refinancing existing indebtedness. Standard Chartered Bank Uganda is the investment advisor. The bank will also be issuing and paying agents. Other advisors include National Social Security Fund who are the underwriters, Livingstone Registrars (Uganda) Limited are the trustees while KPMG are the auditors and reporting accountants.

The Monitor