Telkom Kenya owners pump Sh30bn after Helios deal

National Treasury Cabinet Secretary Henry Rotich reads the 2016/17 budget at Parliament Buildings in Nairobi on June 8, 2016. Mr Rotich has said although Telkom Kenya has been facing a number of challenges for a fairly long time, the government is optimistic that it will turn around the firm under the new partnership. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP

What you need to know:

  • This follows completion of the sale of a 70 per cent stake which France Telecoms held in the third largest mobile operator in the country.
  • Helios announced that it will be naming a new management structure on Monday that will see the positions of chief executive officer, chief finance officer and chief technical officer filled.

Telkom Kenya shareholders will inject Sh30 billion into the loss making company in a fresh capitalisation agreement signed with Helios Investment Partners on Friday.

This follows completion of the sale of a 70 per cent stake which France Telecoms held in the third largest mobile operator in the country.

Under the sale agreement, Helios acquired the shareholding but agreed to transfer 10 per cent share to the Government of Kenya increasing the government’s ownership to 40 per cent.

Telkom Kenya is expected to repay the shareholder loans based on the new shareholder structure, meaning that the government will be receive Sh12 billion without contributing a cent. Helios will receive Sh18 billion.

Helios has registered Jamhuri Holdings Limited as the local company to take over the shares.

Helios announced that it will be naming a new management structure on Monday that will see the positions of chief executive officer, chief finance officer and chief technical officer filled.

The new structure is also expected to reduce the number executives reporting to the CEO to four, down from the current nine. 

Treasury Secretary Henry Rotich said although Telkom Kenya has been facing a number of challenges for a fairly long time, the government is optimistic that it will turn around the firm under the new partnership. 

“We have seen the positive impact of Helios’ investments in other sectors of our economy and we hope and trust that their investment in Telkom Kenya will have a transformative impact on the operations and standing of the company,” Mr Rotich said during the signing of the sale agreement.

Mr Eddy Njoroge has been retained as Telkom Kenya board chairman. Mr Njoroge said the new shareholders have agreed to restructure the management.

“The company is confident that the combination of the Helios’ expertise, resources and experience and track record in investment across the continent will be invaluable contributors to Telkom Kenya’s transformation,” he said.

Last week the Competition Authority of Kenya (CAK) gave its approval for the deal.

Until 2012, the government had a 49 per cent stake in Telkom Kenya while France Telecom held the remaining 51 per cent.

But the State ceded a nine per cent stake in December 2012 following a Sh30 billion debt write-off before losing another 10 per cent last June after it failed to inject Sh2.4 billion in a Sh10 billion rights issue.

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