UGANDA – National Social Security Fund (NSSF) is seeking an investor to jointly capitalise Uganda Clays Limited (UCL).
Securing an investor, according to Mr Richard Byarugaba, the NSSF managing director, will kick start the process in which the Fund will retire an outstanding debt of US$5.69 million (USh21billion) it holds in Uganda Clays.
“The UCL debt will be retired when we find an investor. As of now we have not got any investor,” Mr Byarugaba told Daily Monitor in an interview on the side lines of a briefing about Uganda Clays’ 20 years on the Uganda Securitas Exchange.
At the same briefing, Mr George Inholo, the Uganda Clays managing director, said that whereas they had cleared much of the company’s debt stock, they still have an outstanding debt due to NSSF.
The debt, he said, is likely to be retired this year after finding a new investor.
Mr Inholo also told Daily Monitor that it was the responsibility of NSSF to find an agreeable investor with which it will join hands to initiate investment plans for UCL.
NSSF is the largest shareholder in UCL with 32 per cent holding.
In 2010, NSSF granted UCL an unsecured loan of Shs11.05b to procure spare parts for the Kajjansi factory, enhancement of kiln at the Kamonkoli factory, and payment of critical current liabilities.
The loan was drawn out at an interest of 15 per cent per annum over a tenure of 10 years.
The loan grew with accumulated interest as of December 31, 2015 standing at US$2.93 million (USh10.8 billion). However, since 2016, interest had been waived and UCL later negotiated for the loan to be turned into equity.
In 1993, government launched a privatisation programme, under which UCL was privatised.
Its main business has expanded over the last 55 years to production and sale of roofing tiles, walling materials such as burnt clay bricks, interlocking and corner blocks and decorative clay products.
The company was listed on the USE on January 18 2000 becoming the first equity to be listed on USE. During the Initial Public Offer, Uganda Clays’ shares were oversubscribed by 15 per cent.
Whereas the company has over the years been struggling to shake off losses, it has seen a reduction in its profit margin in the last few years.