France Telecom’s intended sale of a 70 per cent stake in Telkom Kenya to Helios has been termed a private transaction, putting the deal outside the scrutiny of Parliament.
A transactions aiser who worked on the deal reckons it is a private one and the State’s holding of 30 per cent in the telco will not be affected by sale to the London-based private equity firm.
There have been calls from lobby groups and a member of the National Assembly’s Public Investment Committee (PIC) for the terms of the deal to be made public before approval.
“It must be clearly understood that this transaction is not a privatisation of Telkom Kenya,” said the deal maker who preferred anonymity because the deal is not concluded.
“It is a private transaction between Orange Group and Helios. Disclosure of the details of the transaction is subject to the usual confidentiality restrictions.”
Orange and Helios on Monday announced they had signed an agreement with Helios investment partners for the sale of its entire 70 per cent stake in Telkom Kenya.
READ: Helios buys entire Orange stake in Telkom Kenya
The deal remains subject to regulatory approval. Consumer Federation of Kenya secretary-general Stephen Mutoro said the transaction should not be approved until the government divulges its details.
France Telecom bought a 51 per cent stake in Telkom Kenya for Sh26 billion in 2007 with the aim of turning around the loss-making firm.
PIC chairman Adan Keynan is also demanding a say in the deal. The State’s ownership was diluted to 30 per cent after it failed to participate fully in a rights issue, raising France Telecom’s stake.
The French giant has struggled to return Telkom Kenya to profitability for eight years.
Helios, in a statement, reckoned it will return the firm to profitability. The PE firm said it will reveal its business plan once the deal is concluded, arguing the management of Telkom Kenya currently remains in the hands of Orange.
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.
SOURCE: BUSINESS DAILY