Orange has finally agreed a sale of its troublesome Kenyan asset, exiting a challenging relationship with its fellow shareholder – the local government – and making good on plans to hold a number one or number two position in each of its markets.
Orange (EPA:ORA) has signed a binding agreement to sell its 70% stake in Telkom Kenya to Helios Investment Partners for an undisclosed sum, seven months after declaring it had “lost control” of the asset.
Orange previously said continuing disagreements with the Kenyan government, which owns the remaining 30% of the operator, meant it was contractually unable to implement planned financing solutions without its fellow shareholder’s consent.
Orange, which was advised by Lazard, emphasised that the Africa and Middle-East portfolio remains a strategic priority.
The transaction is subject to approval by relevant authorities.
Helios declined comment. Elsewhere in Kenya, the Africa-focused private equity firm is an investor in cableco Wananchi and financial services firm Equity Bank.
Other telecoms investments include Africatel, Helios Towers Africa, and Helios Towers Nigeria, which within the last two weeks announced and then called off a London IPO, citing takeover interest.
Following Essar’s agreed sale of Yu Mobile last March, Orange launched a strategic review of its Kenyan and Ugandan businesses, entering talks with Viettel and receiving reported interest from Nigeria’s Megatech Engineering.
Telkom Kenya is the sole provider of landline telephony in the country and the third largest cellco with four million customers, giving it an 11.2% slice of the market as of 30 June, according to figures published by the Communications Authority of Kenya.
Safaricom is the market leader with 24 million customers (a 67% share), while Airtel 6.8 million (19.4%) and MVNO Equitel has 873,6000 (2.4%).
Kenya has a mobile penetration of 83.9%, compared to 85.5% as of end-March. In broadband, the incumbent – which the regulator said had shut down its copper network during the quarter to replace it with fibre – competes with cableco Wananchi and fibreco Liquid Telecom.