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The national security Council of Kenya has approved the State acquisition of Telkom Kenya creating a furor in the parliament. The U S $1 (Sh125.6) deal is for the purchase of a 60 per cent stake from a UK-based private equity fund, Helios Partners.
The national security Council of Kenya has approved the State acquisition of Telkom Kenya creating a furor in the parliament. The U S $1 (Sh125.6) deal is for the purchase of a 60 percent stake from a UK-based private equity fund, Helios Partners. The UK-based fund had bought a 70 percent stake from Orange, the French telecom operator.
The deal marked a rare U return of a privatised company getting back to State ownership upsetting the plans for the listing of Telkom Kenya at the Nairobi Securities Exchange (NSE) through an initial public offering (IPO).
In the deal, which was justified on grounds of risk to national security, Kenya reimbursed Helios U S $51 million through a three-year government bond for shareholder loans. The key functions of Telkom Kenya include providing critical government communications services to the Office of the President, the State House, the government data centre, the Ministry of Interior, the General Service Unit, the Department of Defence’s restricted communications networks, and other critical State functions. It also manages critical security infrastructure, including carrier services, landing stations, undersea cables, and meet-me rooms.
To conclude the deal, National Treasury has sought payment of an amount equivalent to $51.18 million under Article 223 of the Constitution, to Jamhuri Holdings a Mauritius-based firm for Helios’ shareholding in Telkom Kenya. The Treasury is allowed to spend money on emergencies without the approval of Parliament under Article 223 of the Constitution. The transaction has led to heavy losses for Helios, which had made outstanding returns from share dealings in Africa. Its acquisition and sale of shares in Equity Group is an example of its success.
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The Security Council is chaired by the President and consists of nine members such as heads of the National Police Service, the Kenya Defence Forces, and the National Intelligence Service.
