Telkom Kenya has secured a strategic investor shortly after the Cabinet invalidated a deal forged the previous year between the telecommunications company and the former government. In 2022, a decision was reached for the government to acquire a 60% ownership stake in Telkom Kenya from the London-based private equity firm Jamhuri/Helios. The government led by President William Ruto canceled this transaction on Tuesday, citing governance issues associated with the agreement made during President Uhuru Kenyatta’s tenure.
In an official statement, the Cabinet explained that the cancellation would bolster Telkom Kenya’s operational capabilities and position it as a formidable competitor in the telecommunications market. Njuguna Ndungu, the Treasury and National Planning Cabinet Secretary, commented on the matter, saying, “The Government of Kenya in 2022 agreed to buy 60% shareholding in Telkom Kenya Limited from Jamhuri Holdings Limited (Jamhuri/Helios), following the decision by Jamhuri/Helios to exit the company.”
“Subsequently, however, the Government of Kenya decided to revise the transaction to allow another private investor to acquire the 60% shareholding from Jamhuri/Helios. To that end, a competitive process to identify the new investor was initiated in January 2023, resulting in an evaluation that recommended the Infrastructure Corporation of Africa LLC (ICA) from the United Arab Emirates as the new majority shareholder in Telkom, based on their proposed offer.”
Ndungu further explained that ICA’s offer included a capital injection to support Telkom’s critical infrastructure and overall enhancement of the company’s capabilities, as well as the settlement of some outstanding liabilities.
As part of the arrangement, the government, through the National Treasury, will fulfill its obligations as a minority shareholder and a key consumer of Telkom’s services. Additionally, as a crucial stakeholder, the Kenyan government will actively pursue regulatory reforms aimed at rectifying structural imbalances in the telecommunications industry, benefiting all stakeholders, especially the public as consumers.
To complete the process of bringing ICA on board, the government will collaborate with Jamhuri/Helios to transfer their 60% ownership stake directly to ICA. This process will inevitably entail the revocation of previously signed transaction documents between the Government of Kenya and Jamhuri/Helios, among other necessary actions.