Nigerian private equity firm Teleology Holdings has until November 2018 to pay US$7 million or 10% of its winning bid for state-owned Uganda Telecoms.
Teleology Holdings bid US$71 million for a 67% stake in the telco which has been under government control since March 2017 - this after the government of Libya relinquished its majority stake in the operator.
In July 2018 Uganda's Economic Intelligence Authority presented Mauritius Telecom as preferred bidder with its offer of US$45 million for 69% of shares. This changed when the preferred bidder raised its initial offer from US$60.5 million to US$70.8 million for 67% stake in the company.
Teleology has to make a non-refundable payment of 10% of the bid amount before the November deadline, and has to pay the balance by January 2019.
Should the company fail to comply, the government has claimed to right to cancel the acquisition and search for a new prospective partner.
Aside from its stake in Uganda Telecoms, Teleology Holdings will also enjoy tax exemptions, frequency spectrum of the incumbent operator as well as management of the national fiber optic infrastructure for 20 years.
The acquisition marks the expansion of Teleology Holdings from Nigeria to Uganda where it recently acquired 9mobile, the country's fourth largest operator for USD251 million.
A recent Fitch Solutions Macro Research report has expressed concern over Teleology Holdings' sojourn in Uganda.
It warned that government's interference in the operations of Uganda Telecoms may increase - especially if the firm struggles to claw back market share in the challenging market.
"Additionally, it faces headwinds from fierce competition from larger operators and a likely tenuous partnership with an increasingly heavy-handed government," the Report stated.