The acquisition of Telkom Kenya by Helios Investment Partners could give the Kenya government a second chance to safeguard the public and employees’ interests in the company through a new shareholder agreement.
The government hopes to buy back about 12 million shares, equivalent to 10 per cent in Telkom Kenya Ltd (TKL) to raise its total holding to 40 per cent. This will return the government’s shareholding to where it was before it lost 10 per cent controversially in a rights issue in 2013.
National Treasury Cabinet Secretary Henry Rotich said that the government will negotiate a fresh share sale-purchase agreement with Helios, which bought a 70 per cent stake in Telkom Kenya from France Telecom, once its directors join the board by January 2016.
“At the moment, we want to negotiate a new shareholder agreement with the new partners. Once it is signed, we can now sit down and discuss what we want with them,” said Mr Rotich.
“We shall negotiate a share sale-purchase agreement with them but details are still confidential until we conclude the discussions on the new shareholder agreement,” he added.
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The government is being driven by the need to protect employees, who are anxious over job losses should the new owners start restructuring as expected, and taxpayers, who stand to lose dividends on future profits of the company.
The shares in question were transferred without appropriate due diligence leading to loss of jobs and loss of public funds, according to Parliament’s Public Investment Committee (PIC). Had due diligence been properly done, the committee found, the government share in the company would have dropped to 35.1 per cent after the rights issue.
e on The EastAfrican
SOURCE: BUSINESS DAILY