Telkom Kenya has landed a strategic investor, few days after the Cabinet canceled a deal sealed last year between the telecommunication company and the previous government.
A decision was made in 2022 for the government to purchase from London-based private equity firm Jamhuri/Helios the 60 per cent shareholding in Telkom Kenya. The President William Ruto led government on Tuesday cited governance challenges while canceling the transaction made during President Uhuru Kenyatta regime.
In a dispatch, the cabinet noted that the cancellation will enhance the operational capacity of Telkom Kenya and make it a competitive player in the telecommunications market.
“The Government of Kenya in 2022 agreed to buy 60 per cent shareholding in Telkom Kenya Limited from Jamhuri Holdings Limited (Jamhuri/Helios), following the decision by Jamhuri/Helios to exit the company,” said Njuguna Ndungu, Treasury and National Planning Cabinet Secretary.
“Subsequently, however, GoK made a decision to amend the transaction so as to have another private investor to acquire the 60 per cent shareholding from Jamhuri/Helios. In this regard, a competitive process to identify the new investor was set in motion in January 2023, resulting in an evaluation process that recommended the Infrastructure Corporation of Africa LLC (ICA) of the United Arab Emirates, to be the new majority shareholder in Telkom, based on the offer they put forward.”
According to Njuguna Ndungu, the offer by ICA includes capital injection to fund Telkom’s critical infrastructure and the overall upgrade of the company’s capabilities, and also settle some of the outstanding liabilities of the company.
The government through the National Treasury will meet its part of the obligations as a minority shareholder and as a key consumer of services offered by the company.
Further, the government of Kenya as a critical stakeholder will pursue the actualization of regulatory reforms that are necessary to correct the structural imbalance in the telecommunications industry for the benefit of all stakeholders, key of whom is the public as a consumer.
“In order to complete the process of onboarding ICA, government will work with Jamhuri/Helios to transfer their 60 per cent shareholding directly to ICA, this process will inevitably require rescinding of the transaction documents already signed between GoK and Jamhuri/Helios, among other necessary actions.”