A day after the government announced it had cancelled its purchase of Telkom Kenya from Helios, a new investor has been revealed. The Infrastructure Corporation of Africa LLC (ICA) of the United Arab Emirates (UAE) is set to be the new majority shareholder in Telkom.
For a huge portion of the year, the government has been actively in search of an investor. Now, it has confirmed they have found a suitable match.
“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.” Read a statement from the Treasury.
Telkom has been ailing as a telco falling behind its peers in all measures of service delivery. Now the future looks bright, at least on paper. ICA has promised to inject capital to fund Telkom’s critical infrastructure. Secondly, it has promised to upgrade the company’s capabilities.
Notably, ICA has also offered to settle some of the outstanding liabilities of the company. Telkom is reported to have a debt of KES 7.2 billion. KES 3.3 billion is owed to America Tower Company (ATC), the company that manages Telkom’s infrastructure.
ICA Onboarding Process Begins
The government notes it has rescinded the purchase from Jamhuri/Helios as the “process has not been carried through to completion”.
In June, Broadcasting Principal Secretary Prof. Edward Kisiang’ani said Telkom’s legal status is contestable. Now, the process to bring ICA LLC as the new majority shareholder will be kickstarted.
Further, the government states it will work with Helios to transfer their 60% 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,” the statement from Treasury further notes.
Recognizing wrangles and complaints of uneven ground in the telco sector, the government has promised reforms. Telcos in Kenya have long complained that Safaricom has used its market dominance unfairly.
Regarding the matter, the government states:
“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.”