From left: Telkom Kenya chief executive Mickael Ghossein, Safaricom CEO Bob Collymore, Airtel Kenya managing director Shivan Bhargava and yuMobile country manager Madhur Taneja at a past media event. Photo/Diana Ngila
What you need to know:
The Communications Commission of Kenya (CCK) confirmed Monday it had received application for approval of the buyout, which will also be subject to scrutiny by the Competition Authority of Kenya.
yuMobile is targeting conclusion of its impending sale to rivals Safaricom and Airtel within the next three months, subject to approval of the deal by regulators.
The Communications Commission of Kenya (CCK) confirmed Monday it had received application for approval of the buyout, which will also be subject to scrutiny by the Competition Authority of Kenya.
yuMobile which is owned by Indian conglomerate Essar is selling its business to the two leading operators at a reported Sh8.6 billion. Country manager Madhur Tanaje Monday said yu expects to close the deal by about June.
“We filed (with) CCK on Friday and we hope this will take between 60 to 90 days to get the final approval,” said Mr Tanaje.
Safaricom, Kenya’s leading telecommunications company and one of the said suitors for yu’s assets, yesterday claimed it has not signed any agreement with yuMobile and as such could not comment on the alleged transfer of some of the 233 yuMobile employees to the firm.
Safaricom is expected to acquire yuMobile infrastructure while Airtel will acquire the numbering prefix, gaining the 2.7 million yuMobile subscriber base.
“The company is engaged in substantive talks with two potential suitors who are willing to takeover its subscriber base and assets, subject to requisite approvals by the authorities,” said yuMobile in a statement.
The firm’s employees have gone to court seeking orders for Taneja to surrender his travel documents arguing that he may flee the country.
The 233 workers who moved to the Industrial Court want to stop an impending sale of the company until the firm discloses to them terms of on alleged retrenchment plan.
The employees are also seeking an alternative order for yuMobile to deposit a security of Sh1.25 billion with the court, the amount they claim to be due to them from the firm in the event of retrenchment.
“Safaricom has not signed an agreement with Essar and if we were to do so, as a listed company, we would have to make the necessary announcements through the relevant capital markets channels,” Nzioka Waita, Safaricom’s Corporate Affairs director said in a response to Business Daily queries.
yuMobile has also sold its 10 per cent stake in the undersea fibre optic The East Africa Marine System to Safaricom as part of the fundraising efforts.
The firm has been struggling to break even since it entered the Kenyan market in 2008 and has been relying on its parent company and loans to run its business. Its performance has been worsened by the ongoing price war which has seen airtime prices more than halve since August 2010.
Yu’s share of Kenya’s voice traffic stood at eight per cent in September and its subscribers have grown from 1.59 million in 2010 to 2.7 million last year.
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