Companies

Telkom retains its debts in merger with Airtel

Telkom Kenya will retain its billions of shillings worth of debt even as it transfers its mobile operations, enterprise and carrier business to Airtel Kenya in a merger.

The disclosure by the parties in a press notice provides more detail on the structure of the private deal.

Telkom will move most of its assets from Telkom plaza within Nairobi central business district to Airtel offices located on Parkside Towers along Mombasa road.

“The proposed transferee (Airtel) is not assuming nor does it intend to assume all the liabilities incurred in the transfer business by the proposed transferor (Telkom),” read the notice published by the parties.

The statement did not clarify whether Airtel will absorb any of Telkom’s liabilities.

Telkom’s chief executive Mugo Kibati had not responded to our queries by the time of going to press.

Telkom is set to acquire a stake in Airtel once the tie-up is concluded. Post-merger, the unified company will take on a new name. “After completion of the proposed transaction, the proposed transferee (Airtel) will be renamed to reflect the joint venture of the parties,” the notice said.

This will mark the latest rebranding for Airtel whose ownership has changed hands multiple times over the years.

From the initial Kencell, it switched to Celtel then Zain before taking on its current moniker.

The deal will see Kenya’s second and third-largest telecom operators command 16 million mobile subscribers against Safaricom’s 30 million.