Helios takeover of Telkom Kenya delayed by lack of cabinet approval

Mergers, Acquisitions and Financial Results

UK based private equity firm Helios’ acquisition of a 60 percent stake in Telkom Kenya has been delayed further by failure of cabinet to approve the sale.

The Government, which holds 40 percent of the company, is yet to agree to a new shareholder agreement with Helios, delaying the transaction which begun in October 2015.

Treasury Cabinet secretary Henry Rotich has said legal advisors have been brought on board to comb through the deal before the government gives the go ahead.

“The documentation has been finalized and is being reviewed legally before a decision is made,” Mr Rotich said

France Telecom acquired a majority stake in Telkom Kenya in 2007 but has been struggling to make profit prompting its exit from the market. Helios emerged as the best candidate to acquire the majority stake in the telecom operator but been forced to await clearance from both cabinet and the Communications Authority.

The private equity firm has not given much in terms of the strategy it intends to adopt in the Kenyan market, but is believed to planning major operational changes.

“We are on the final stages now. The documentation is being reviewed and in due course once we have all the final approvals which include cabinet, the transaction will be executed,” Mr Rotich said.

One of the last hurdles for Helios remains the requirement to pay off Sh1.4 billion to the Communications Authority as frequency and license fees for two financial years. The Competitions Authority has already given the deal the green light arguing it did not pose a threat to fair competition in the telecom sector.

Source privy with the deal however say Helios has appointed Aldo Mareuse as the Chief Executive Officer to take over from Vincent Lobry once the deal is concluded.
Source: Citizen Digital 23 May 2016