India’s Essar Communications Holdings is set to acquire the remainder of Kenyan mobile operator Essar Telecom Kenya, according to Business Daily Africa.
The Indian owner, which holds an 80% stake, is reportedly close to buying out the 20% stake owned by…
India’s Essar Communications Holdings is set to acquire the remainder of Kenyan mobile operator Essar Telecom Kenya, according to Business Daily Africa.
The Indian owner, which holds an 80% stake, is reportedly close to buying out the 20% stake owned by local investors Capital Africa, CrossLink and Startnet. These had originally bought 30% of the operator to comply with domestic ownership rules when Essar bought its own 49% stake in Econet Wireless, which is now known as Essar Telecom Kenya, the country’s number four operator, four years ago.
Once this process is complete, Essar Communications will then have to reduce its stake back down to 70%, meaning that it will need to find new local investors to buy the remaining 30% – there have been allegations that the current shareholders have failed to add value to the company, and that new investors would need to demonstrate that they would be able to support the business.
The newspaper reported that local law firm Anjarwalla & Khanna were advising Essar, but cited sources who said that these firms may in fact have already purchased the 20% stake in question from the local investors.
Businessman Jos Konzolo, who is affiliated with the local investors, reportedly confirmed that a deal was underway without providing further details.
Essar Telecoms Kenya MD Atul Chaturvedi, for his part, was cited denying other reports alleging that a wider ownership change – which could include a new strategic investor – was expected. This appears to oppose the view of the Communication Commission of Kenya’s statement that Essar had informed it of plans to register a new ownership structure, the newspaper wrote.
Essar and the local investors were not available for comment by press time.