Kenya to sell shares in Telkom, Safaricom

NAIROBI – Kenya will offer 60 per cent of its shareholding in fixed-line monopoly Telkom Kenya on the stock exchange and to a strategic investor after it restructures the loss-making company, President Mwai Kibaki said yesterday.

“The government is going to sell 34 per cent of the company shares on the Nairobi Stock Exchange,” Kibaki told an information technology conference. “We are also looking for a strategic partner to take up to 26 per cent of the company’s shares.”Information and Communications minister Mutahi Kagwe said that to finance the restructuring of Telkom Kenya, the company would sell nine per cent of leading mobile firm Safaricom to Britain’s Vodafone Group Plc .Telkom Kenya owns 60 per cent of shares in Safaricom, which it jointly owns with Vodafone.Vodafone had offered to purchase an 11 per cent stake in Safaricom from Telkom at US$100 million but government sources said Kenya had baulked at the prospects of giving the British company control of the mobile operator.Kagwe told reporters that the government had to offer the nine per cent stake to Vodafone because the company has pre-emptive rights.”Earlier Vodafone had offered to buy 11 per cent at US$100 million (N$620 million).I don’t want to say how much I am looking for but I am looking for a lot more than that for nine per cent,” Mutahi Kagwe, the minister for information and communications told reporters.Based on a consultant’s report, the cost of restructuring Telkom Kenya and buying out around 12 000 of its 18 000 employees would range from US$154 million to US$300 million.The restructuring is deemed as an essential step before Telkom’s privatisation can go ahead, as aid donors have insisted.Kenyan businessmen have long complained that poor telephone services add a huge cost to doing business in the country, east Africa’s biggest economy.- Nampa-Reuters”We are also looking for a strategic partner to take up to 26 per cent of the company’s shares.”Information and Communications minister Mutahi Kagwe said that to finance the restructuring of Telkom Kenya, the company would sell nine per cent of leading mobile firm Safaricom to Britain’s Vodafone Group Plc .Telkom Kenya owns 60 per cent of shares in Safaricom, which it jointly owns with Vodafone.Vodafone had offered to purchase an 11 per cent stake in Safaricom from Telkom at US$100 million but government sources said Kenya had baulked at the prospects of giving the British company control of the mobile operator.Kagwe told reporters that the government had to offer the nine per cent stake to Vodafone because the company has pre-emptive rights.”Earlier Vodafone had offered to buy 11 per cent at US$100 million (N$620 million).I don’t want to say how much I am looking for but I am looking for a lot more than that for nine per cent,” Mutahi Kagwe, the minister for information and communications told reporters.Based on a consultant’s report, the cost of restructuring Telkom Kenya and buying out around 12 000 of its 18 000 employees would range from US$154 million to US$300 million.The restructuring is deemed as an essential step before Telkom’s privatisation can go ahead, as aid donors have insisted.Kenyan businessmen have long complained that poor telephone services add a huge cost to doing business in the country, east Africa’s biggest economy.- Nampa-Reuters