Editorials
State must come clean on Telkom Kenya deal
Friday October 06 2023
The National Treasury and Economic Planning Cabinet Secretary Prof Njuguna Ndung’u on May 3, 2023. PHOTO | EVANS HABIL | NMG
A fresh plan to sell majority shares in Telkom Kenya to a United Arab Emirates (UAE)-based firm has once again tested the commitment by the government to keep such transactions transparent.
The latest push to transfer control of the company to an Emirati company, which has very little online presence, comes before the dust settles on yet another controversial decision by the previous administration to buy a 60 percent stake from London’s Helios Investment Partners.
The Treasury revealed it had settled on Infrastructure Corporation of Africa LLC (ICA) of the UAE to be the new majority shareholder in Telkom Kenya following a competitive process that started in January 2023.
This came hours after the Cabinet rescinded the decision in July last year that saw Helios pay Sh6.09 billion to exit the telco, directing the London-based private equity fund Helios to refund the amount. As expected, the transaction continues to raise many questions.
The initial deal saw the government pay Helios a peppercorn amount of $1 (Sh148.45 at Friday’s rate) as consideration for the deal, while another $51 million (Sh7.57 billion at Friday’s rate) was reimbursement of shareholder loans that the fund had provided Telkom Kenya. First, what exactly will Helios refund? Is it the shareholder loans or the $1 consideration amount?
Secondly, the Treasury says the deal came after a competitive process. When and where was the expression of interest done? Who responded to the bids and how did the government arrive at the successful bidder? The other question is just who is Infrastructure Corporation of Africa LLC (ICA) and who are its shareholders.
