Kenya is set to get 10per cent stake for free in Telkom Kenya as part of the deal Helios made with Telco. Helios is set to take over the majority interest in the underperforming telco from france Telcom.
Principal Secretary in the Ministry of Information and Communications Technology Victor Kyalo, said the proposed transfer of the 10 per cent stake to the National Treasury from France Telecom was purely a business deal.
“We had a right of refusal to block France Telecom from selling the 70 per cent stake to Helios but we placed a bid for the 10 per cent, which was offered to us at no cost,” said Mr Kyalo.
He also confirmed the information that the proposed share sale at Telkom Kenya has so far not received regulatory approvals from the Competition Authority of Kenya and the Communications Authority of Kenya.
The government and Helios are devising a business strategy through which Telkom can be taken off capital injections from shareholders to raising funds for its own activities for the financial markets.
Kenya’s stake in Telkom Kenya fell from 40 per cent to 30 per cent in 2014 after it was unsuccessful in putting Ksh2.4 billion ($23.23 million) during a rights issue.
The National Treasury together with Helios are discussing a new shareholder agreement and plans are also made to restructure the balance sheet of under performing firm that is also highly indebted in an effort to revamp its position and put it in a position where it can acquire new lenders.
Telkom Kenya’s creditors include rival firm Safaricom, which is owed Ksh639 million ($6.18 million) and the Communications Authority of Kenya, which is owed Ksh1.5 billion ($14.51 million).
There is no exact time frame as to when the new shareholder agreement discussions will be finalized to allow the exit of Telecom France.
Mr Rotich said “We have people who are negotiating and when they finish, they will inform me. It will be soon.”
The French firm that it currently closing its operations in East Africa due to loss making, is also faced with disputes with workers union.