The International Finance Corporation (IFC) is among a group of debt investors that will fund Axian Telecom’s acquisition of Kenya’s Wananchi Group.
The global financier will be the lead investor in a $550 million bond to be issued by Mauritius-based Axian, with part of the proceeds earmarked for buying out telecoms and entertainment firm Wananchi. IFC intends to invest $75 million (Sh9.6 billion) in the bond.
“IFC is considering anchoring Axian Telecom’s bond issuance of up to $550 million...with an investment of up to $75 million,” IFC said in its disclosures.
“The financing will be used for refinancing the outstanding bond, financing the acquisition of Wananchi Group, a broadband Internet supplier headquartered in Kenya and general corporate uses.”
Wananchi’s buyout price has not been disclosed, but it is expected to run into billions of shillings.
Axian in August 2024 signed a deal to acquire a 99.63 percent stake in Wananchi, which offers fibre, Internet and pay television services in Kenya, Uganda and Tanzania.
Wananchi’s significant shareholders, as of the latest available disclosures, include Altice and Liberty Global Plc.
These investors acquired stakes in the Kenyan firm in 2022 when they converted their debt into equity, a move that diluted earlier investors.
The buyout of the Zuku pay-TV firm came after it spent heavily on regional expansion. The firm raised Sh12 billion in 2014 for regional expansion, which saw it open operations in Uganda, Tanzania, Mauritius, Malawi and Zambia. Wananchi is also registered in Rwanda, but it has been dormant.
In Kenya, its Internet services are estimated to have a market share of between 15 and 20 percent, while Zuku has a 12 to 18 percent share.
In Uganda Wananchi has an estimated market share in Internet provisioning and a 10 to 15 percent pay-TV share. The group enjoys between 10 and 15 percent market share in Malawi, where it operates as Simbanet.
Axian, founded in Mauritius, has, since 2015, been on an expansion drive across Africa through acquisitions, which has seen it ranked the sixth largest mobile operator in the continent.
It currently has 41 million mobile subscribers across different markets, which include Tanzania, Uganda, the Democratic Republic of Congo, Comoros, Togo and Senegal.
Axian has issued multiple bonds in the last five years, which have received support from international development organisations such as IFC, British International Investment, DEG and Proparco, funding the expansion drive. The firm is also in the mobile money business with over 15 million subscribers under its Yas brand.
The telecom firm has offices in Kenya, which are only used for administrative purposes. The acquisition of Wananchi will enable it to launch in the country with a recognisable brand while deepening its presence in the other East African markets where it already has operations.
Wananchi was formed in 1998 by the late Njeri Rionge and former Information, Communications and Technology Cabinet Secretary Joe Mucheru.
