Infrastructure Corporation of Africa LLC (ICA) of the United Arab Emirates will be the new majority shareholder in Telkom Kenya.
This follows the transfer of a 60pc shareholding the government held in the telco which it acquired from Helios, a firm owned by Jamhuri Holdings Limited to the tune of Ksh 6.091 billion.
“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,” National Treasury and Economic Planning Cabinet Secretary Prof. Njunguna Ndung’u said in a statement released Wednesday.
The Cabinet during its sitting on Tuesday agreed to rescind earlier transaction which was yet to be completed including transaction documents already signed between the two parties, in order to onboard ICA as the new majority
shareholder in Telkom.
The transaction done last year by the previous administration has been a subject of a parliamentary inquiry given the nature of the transaction.
During the hearing held in March this year, MPs questioned the transaction given the firm had pending obligations to regulators and other service providers.
The telco for instance owed Communications Authority of Kenya (CA) telco owes the regulator Ksh 9.4 billion in unpaid license fees and penalties by the time transaction was being conducted.
Treasury said ICA agreed to a capital injection to fund Telkom’scritical infrastructure and the overall upgrade of the company’s capabilities, and also settle some of the outstanding liabilities of the company.
In June this year, Information, Communications and Digital Economy Cabinet Secretary Eliud Owalo told legislators that the government was looking for a strategic investor to acquire majority stake in the firm with exchequer expected to clear at least Ksh 7.2 billion of the telco’s debt.
As part of the deal, government which will now be the minority shareholder with a 40pc stake will help boost the firm’s much needed cash flow, by being a key consumer of services offered by the Telkom Kenya.
“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, key of whom is the public as a consumer,” added Ndung’u.
The transaction will however still be subject to necessary regulatory approvals.