The government of President William Ruto is set to sell telecommunications firm Telkom to a Dubai based corporation after the cancellation of a multi-billion sale that was done under former president Uhuru Kenyatta.
In the new sale, 60 per cent shares that had been bought by the government from Helios Investments will now be transferred to Infrastructure Corporation of Africa (ICA) LLC.
The National Treasury withdrew Sh. 6.09 billion on August 5, 2022 and paid Jamhuri Holdings Ltd, which is a Mauritius-based subsidiary of Helios, in a transaction that did not get parliamentary approval.
“Government of Kenya (GoK) will work with Jamhuri/Helios to transfer their 60 percent 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,” said Njuguna Ndung’u, the National Treasury Cabinet Secretary.
In the new sale, is however not clear how the new transaction will be conducted, with Helios having already received payments. It is also not clear why the government has opted to rescind the sale done in 2022.
“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,” a statement from the National Treasury.
Reportedly, Telkom has a debt to the tune of Sh. 7.2 billion with Sh. 3.3 billion owed to America Tower Company (ATC).
ICA is said to have agreed to take responsibility for clearing some of Telkom’s outstanding debts.
Much is not in the public spotlight about ICA LLC. It is a Dubai-based firm located in the United Arab Emirates. Under the terms of the agreement, the Kenyan government will become a minority shareholder, holding a 40 per cent stake in Telkom Kenya.
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“Further, GoK 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, the key of whom is the public as a consumer,” the National Treasury said.
