Companies

Telkom Kenya needs up to Sh30bn in capital boost

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Telkom Kenya CEO Mickael Ghossein. Photo/FILE

Telkom Kenya, the owner of the Orange brand, says it needs as much as Sh30 billion in capital injection to get back on track even as it downplayed reports that its parent company is seeking to exit the Kenyan market.

France Telecom, which owns 70 per cent of Telkom Kenya, has reportedly informed the government — which holds a 30 per cent stake — of its intention to sell its entire shareholding and exit the local market after seven years of loss making.

Telkom Kenya CEO Mickael Ghossein on Tuesday failed to confirm the buyout talks, only stating that France Telecom was actively in search of a “strategic partner” to help jumpstart its business.

“I cannot give more details because I am restricted by my colleagues in France,” said Mr Ghossein at a press conference in Nairobi where he announced that the firm’s capital expenditure this year will be Sh2.5 billion.

“We still have cash issues; we are developing the company and we need funds to continue doing this. We need between Sh10 billion and Sh30 billion but I cannot give you the exact figure since it is not my duty to negotiate for cash.”

READ: Telkom Kenya chief unaware of France Telecoms exit plans

France Telecom bought a 51 per cent stake in the operator in 2008 for about Sh27 billion, taking control of the once fully owned State firm.

Two years ago, the firm swapped half of a Sh30 billion loan for an extra stake in the company. The cash was part of a restructuring deal that has been in the works for years.

Despite numerous attempts to jumpstart operations at the firm, Telkom’s revenue for 2013 fell to Sh9.7 billion from Sh10.2 billion the previous year.

Things have not got much better for the French conglomerate in other African countries.

Last month, a London-based online publication, TMT Finance, reported that France Telecom is planning to exit several African markets where it its operations are weak.