Helios buys entire Orange stake in Telkom Kenya

Private equity firm Helios Investment Partners is set to acquire the entire 70 per cent stake in Telkom Kenya held by France Telecom, a deal which gives the struggling telco the financial muscle to take on its rivals Safaricom and Airtel.

The transaction, whose value was undisclosed, will see the Treasury remain in Telkom Kenya with its minority stake of 30 per cent.

“The finalisation of the transaction remains subject to approval from the relevant authorities,” France Telecom, which trades as Orange, said in a statement.

The buyout brings to an end Orange’s long search for an investor to take over its interests in the company which has lost billions of shillings despite several capital injections and debt write-offs by its shareholders.

READ: Telkom Kenya in focus as Orange sells Uganda arm

Helios declined to reveal the value of the deal as well as its strategy in turning around the former monopoly in the fixed line business.

Analysts at Standard Investment Bank (SIB) say Helios could focus on wholesale and Internet business using its existing infrastructure as well as sharing its towers.

“We do not think it will be a major disruptive force to the industry and will target to turnaround to profitability,” SIB said in a statement.

“It could also target to support Mobile Virtual Network Operators (MVNOs) looking to launch in the Kenyan market.”

France Telecom in 2007 acquired a 51 per cent stake in Telkom Kenya for $390 million (K9 billion) but convertible loans doled out to the loss-making telco saw its stake grow to 70 per cent.