French incumbent Orange has reportedly formally informed the Kenyan government that it is in talks with potential buyers of its struggling local unit, Telkom Kenya.
Orange is hoping to offload its 70% stake as early as June, according to local newspaper…
French incumbent Orange has reportedly formally informed the Kenyan government that it is in talks with potential buyers of its struggling local unit, Telkom Kenya.
Orange is hoping to offload its 70% stake as early as June, according to local newspaper the Daily Nation citing well-placed sources.
The French company declined to comment on the report. It however reaffirmed that the group has launched a strategic review of its Kenyan operations. A similar process is ongoing in Uganda.
“One option would be to find new partners in [Kenya] to ensure that the necessary financial and operating resources are available,” Orange said in a statement, adding that its commitment to Africa and the Middle East remains a priority.
As the smallest operator, with only a 7% market share as opposed to 66% for leading player Safaricom, Telkom has been struggling for several years.
In late December 2012, Orange saw its stake in the Kenyan player increase from 60% to 70% after infusing KSh5.1bn (US$59m) into the company and writing off the balance of its shareholder loans.
The government had only paid KSh2.5bn (US$29m), short of the KSh4.9bn it was expected to contribute to maintain its 40% shareholding level.
Orange first acquired a 51% stake in the operator in 2007 for US$390m. Its interest in Telkom Kenya rose to 60% in November 2012 following a similar debt-to-equity conversion.
Another local player, Yu Mobile is currently being sold after facing similar financial difficulties. Safaricom and Airtel initially agreed to split its assets between them but Safaricom recently withdrew from the deal because of regulatory hurdles.
It may however consider returning to the transaction at a later point.
