One day after the government cancelled the purchase of a 60 per cent stake at Telkom Kenya valued at slightly over Ksh6 billion, the National Treasury has announced a Gulf firm is set to become the majority shareholder at the telco.
The investor, UAE's Infrastructure Corporation of Africa LLC (ICA), will absorb the government's stake with the Treasury revealing it will work with Helios to transfer their stake to the former.
“Government of Kenya made a decision to amend the transaction so as to have another private investor to acquire the 60 per cent shareholding from Jamhuri/Helios,” a statement from Treasury read in parts.
"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.”
Per Treasury’s communique, ICA will inject capital into the ailing Telco in a bid to revamp and upgrade it.
Additionally, the Dubai based company which invests in and develops projects in the digital infrastructure sector in Africa, will settle some of Telkom’s debts.
The government on its end, stated that it would meet its obligations as a minority shareholder and a key consumer of the Telco’s products and services
Further, in a bid to prevent such Telcos from failing, treasury pledged to reform the telecommunications sector to promote inclusivity.
“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,” treasury declared.
On October 3, the government went back on it's plan to nationalize the telecommunications company, directing the seller, Helios, to refund the money paid to that effect.
"By dint of this decision by Cabinet, Jamhuri/Helios will refund to the Government of Kenya the amount paid as consideration for the takeover," a communique from State House read in parts,
The purchasing deal in question, was brokered in August 2022.
However, it has been marred by controversy following allegations that the buyout happened without government's approval. This new development resolves that issue.
"The decision by Cabinet offers Telkom Kenya an opportunity to source and onboard another strategic investor, subject to the receipt of all regulatory approvals," Treasury stated.