Govt buys 10% stake in Telkom Kenya for Kshs 1, raises stake to 40%

The government has increased its shareholding in Telkom Kenya from the earlier 30 per cent to 40 per cent following the acquisition of Orange Group’s 70 per cent stake by Helios Investment Partner’s Jamhuri Holdings.

Last week Friday, Orange stated in a brief media statement that “in accordance with the agreement signed in November 2015 between Orange and Helios Investment Partners, and following the approbation of the relevant authorities, Orange today completed the sale of its entire 70 per cent stake in Telkom Kenya.”

“The Africa and Middle-East region remains a strategic priority for the Group. This divestment reflects Orange’s constant focus on optimizing its portfolio of assets,” Orange added.

While announcing the conclusion of the deal in Nairobi on the same day, Treasure CS Henry Rotich noted that the transaction is between two private sector entities, Orange East Africa S.A (OrEA) – a fully owned subsidiary of Orange S.A formally, France Telecom – and Jamhuri Holdings Limited (JHL) – a company owned 100% by HeIios Fund III, a fund which is managed by Helios LLP.

“Through this transaction, JHL is acquiring the 70 per cent shareholding held by OrEA in TKL, which means that OrEA is divesting fully from TKL,” stated CS Rotich.

As part of the transaction, he added, the Government of Kenya reached an agreement with Helios/JHL through which the Government has agreed not to exercise its pre-emptive right to purchase the OrEA Shareholder Loans in consideration of JHL agreeing to the Transfer of 10 per cent of the shares in TKL to the Government for a consideration of Kshs 1 such that the Government’s shareholding in TKL will increase from 30 per cent to 40 per cent; and the Transfer of 40 per cent of the Orange Shareholder Loans which JHL is acquiring from OrEA to the Government for a consideration of Kshs 1.

The new shareholding structure in Telkom Kenya was further clarified by ICT CS Joseph Mucheru on Kictanet.

“We bought an extra 10 per cent shareholding in TKL for Kshs 1 and further we bought 40 per cent of the debt TKL owed Orange (about Kshs 30 billion) for another Kshs 1. Meaning in the TKL balance sheet, they owe GoK about Kshs 12 billion, 40 per cent of the Kshs 30 billion shareholder loan. Balance is owed to Jamuhuru Holdings which is 100 per cent owned by Helios Fund III,” stated Mucheru.

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