Tamoil To Sign $300 Million Final Investment Decision Next Week

Officials of Tamoil East Africa Limited, and members from Kenya and Uganda are to meet in Kampala on April 19, and probably sign the Final Investment Decision (FID). The FID remains the only missing paper work that is needed for construction on the pipeline to begin. The pipeline will go through nine districts in Uganda. In the picture is Habib Kagimu, the Chairman of Tamoil.
However, Striking Deals can reveal that there is high tension between top officials of the Libya backed Tamoil and Uganda’s Energy Minister, Hilary Onek, over the latter’s comments that Tamoil had failed to start work and was offering petty excuses for the delay.
Tamoil has also revised the cost of the project from the $78.2 million that it quoted when it bid for the project in 2006 to $300 million.

Cobalt Firm Looking At Kilembe Mines Limited For Its Survival

Kasese Cobalt Company Limited is banking on the revival of a neglected government parastatal, which has been out of business for more than 30 years, for its survival.
Kasese Cobalt Company Limited has three years to close shop. The company is weighed down by huge amounts of debt, and the cobalt that it produces is not profitable at all to keep the business running.
However, officials at the company believe that the reopening of Kilembe Mines Limited could give it a new lease of life.
Government is seeking to enter into a joint venture with a private company to reopen Kilembe Mines Limited. Any investor wishing to take over the company has to buy more than 51% of the shares in the company, according to one of the requirements, while the option of the investor taking up full ownership of the company at a future date remains a strong possibility. Government wants Kilembe opened within two years.
However the dangers that the toxic waste that could arise out of Kilembe, if it resumes production, have boosted hope within Kasese Cobalt Company Limited of being contracted to manage this toxic waste.
Kilembe Mines Limited is no stranger to destroying the environment. During its peak years in the late seventies, Kilembe Mines Limited dumped waste material just outside its premises. This toxic waste later on formed an acid trail that finally flowed into Lake George, contaminating the lake. Also, huge chunks of the green vegetation in places such as Queen Elizabeth National Park were wiped out due to this toxic waste.
Using funds from different players, Kasese Cobalt Company Limited has since 1999 built a 12,500 cubic metre acid pond into which the remaining acid trail from Kilembe’s dumped wastes flows. In buying time, Kasese Cobalt also wants to boost its production of cobalt.

Two Ugandan Managers Leave Top Foreign Firms

Two Ugandan nationals holding high positions in some of the largest foreign companies in the country have stepped aside. Charles Nalyaali, the Managing Director at Kenya’s Equity Bank, and Francis Kazinduki, the Chief Technical Officer at South Africa’s MTN Uganda, the largest company in Uganda, have left their positions amidst unclear circumstances.
The departure of Nalyaali, the founder of Uganda Microfinance Limited, the company that Equity Bank bought in 2008, had raised tension within the market over Ugandan nationals being sidelined from top positions in foreign companies. Equity Bank today came out to publicly explain that Nalyaali had attained the normal retirement age as stipulated in the bank’s policy.
Nalyaali’s position remains vacant. Equity Bank is now calling for application forms.
For Kazinduki, who has been at MTN for about a decade, his departure remains unclear. Kazinduki is said to be replaced by a Lebanese.

Global Trust Bank Receives $12.5 million. But Not All Is Well!

Finally, Global Trust Bank, owned by Nigeria’s Industrial and General Insurance Company, has received a new lease of life – a Shs 25 billion (about $12.5 million) bailout package from its shareholders.
The company recently released a press release which pointed out that the fresh capital is meant to “shore up the company’s capital base and competitively position it for business growth.” The press release further adds that “the injection of capital into the bank by our shareholders is a measure of their commitment to the enterprise as well as a restatement of their firm belief that Global Trust Bank has a great future.”
What the press release does not say is the bank’s financial dilemma, where huge loans and advances have gone bad, while the banks’ reserve capital fund had almost been stripped bare throughout the first three quarters of last year. This has led to a lot of speculation within the industry about the bank’s financial health.
The bank, in its first full year of operation in Uganda, is expected to announce a loss in the region of $1.5 - $3 million for 2009 when it finally releases its financial statement anytime from now. That announcement is expected to come under sharp focus by shareholders of National Insurance Corporation, Global Trust Bank’s sister company. NIC had benchmarked its profitability for 2010 on the strong synergies it has with Global Trust Bank.

Welcome to STRIKING DEALS with Jeff Mbanga

Today marks a very important day for me. It is the day I begin blogging on financial matters within Uganda, and those outside but have an effect on Uganda. It is an idea that I have thought over for a long time.
Let me welcome you to Striking Deals with Jeff Mbanga.
Part of the reason for starting this blog is to make meaning of the numerous deals happening in Uganda and abroad that never get splashed on the front pages of our newspapers here.
From this blog, you will also get to read some of the scoops about the deals being negotiated. Enjoy!

Who is Jeff Mbanga?

I am a financial journalist. I am currently the Business Editor at The Observer newspaper, a bi-weekly newspaper in Uganda that has built a reputation of breaking stories and taking on a no-holds barred approach to its editorial work.

My most important award so far is the Kikonyongo Capital Markets Journalist of the Year, 2008, where I was chosen by a team of experienced media practitioners contracted by the Capital Markets Authority, the industry regulator.