The Infrastructure Corporation of Africa LLC (ICA) from the United Arab Emirates (UAE) is set to become the new majority shareholder in Telkom Kenya.
This is after the Kenyan government cancelled its 60 per cent purchase from UK private equity firm Helios Investment Partners.
The government has been actively seeking an investor for a significant part of the year, and they have now confirmed that they have found a suitable match.
A competitive process to identify the new investor was initiated in January 2023, which resulted in an evaluation process that recommended ICA to be the new majority shareholder in Telkom, based on their offer.
“In this regard, a competitive process to identify the new investor was set in motion in January 2023, resulting in an evaluation process that recommended the Infrastructure Corporation of Africa LLC (ICA) of the United Arab Emirates, to be the new majority shareholder in Telkom, based on the offer they put forward,” read a statement from the National Treasury.
According to the offer, ICA has offered to settle some of Telkom’s outstanding liabilities.
Telkom reportedly has a debt of KES 7.2 billion, with KES 3.3 billion owed to America Tower Company (ATC), the company that manages Telkom’s infrastructure.
The process to onboard ICA LLC as the new majority shareholder will now commence. The government will work with Helios to transfer their 60% shareholding directly to ICA.
The government states: “Further, GoK as a critical stakeholder will pursue the actualization of regulatory reforms that are necessary to correct the structural imbalance in the telecommunications industry for the benefit of all stakeholders, the key of whom is the public as a consumer.”
Telkom has 4,152 km of its own terrestrial fibre cabling, serving as a key conduit for broadband connectivity inland.
Telkom Kenya also owns a 22.5% stake in TEAMS, a 5,000km undersea fibre optic cable through Fujairah, UAE, and a 10% stake in LION2, another 2,700km undersea fibre optic cable through Mauritius.
It also owns a stake in the East African Submarine System Cable (EASSy) and manages the National Optic Fibre Backbone Infrastructure (NOFBI), on behalf of the Ministry of ICT, an inland fibre optic cable network running through Kenyan counties. Telkom is also the landing partner for the LION2, EASSy, DARE 1 and the PEACE Cables.