Firm gets the nod to sell 70pc stake in Telkom

 A Telkom Kenya outlet on Koinange Street in Nairobi. PHOTO | FILE
A Telkom Kenya outlet on Koinange Street in Nairobi. PHOTO | FILE 

The Competition Authority of Kenya (CAK) has approved France Telecom’s move to sell its 70 per cent shareholding of Telkom Kenya to private equity firm Helios Investment Partners.

Helios has registered Jamhuri Holdings Ltd as the local company to take over the shares.

The government, through the Treasury, owns a 30 per cent stake in Telkom Kenya while France Telecoms that is exiting the local market owns 70 per cent.

“Pursuant to the provisions of section 46 (6) (a) (ii) of the Competition Act, 2010, it is notified for general information of the public that the Competition Authority of Kenya has authorized the proposed acquisition of 70 per cent of the issued share capital of Telkom Kenya Limited by Jamhuri Holdings Limited,” Francis Wang’ombe, the CAK director-general said in the Kenya Gazette notice published on Friday.

The CAK approval follows an earlier authorisation of the deal by the sector regulator, Communications Authority of Kenya (CA), on condition that Telkom Kenya offset the frequency fees it owed the authority.

In April, Telkom Kenya paid Sh300 million to settle part of the Sh1.5 billion it owed the Communications Authority of Kenya (CA) in frequency fees arrears.

Telkom Kenya is said to be in talks with the Treasury to offset part of the balance (Sh1.2 billion) that the government currently owes the firm.

The telco in April also reportedly agreed to settle Sh693 million owed to Safaricom by May 1.

Until 2012, the government had a 49 per cent stake in Telkom Kenya while France Telecom held the remaining 51 per cent.

But the State ceded a nine per cent stake in December 2012 following a Sh30 billion debt write-off before losing another 10 per cent last June after it failed to inject Sh2.4 billion in a Sh10 billion rights issue.

Helios has recently held meetings with government officials on the rebalancing of Telkom’s books, agreeing on how the telco would settle its debts and signing a clause guaranteeing that the Treasury’s shares in Telkom will not be diluted.

The entry of Helios into Kenya’s telecommunications sector is expected to step up competition for Airtel and market leader Safaricom, which dominates both the voice and data markets.