Airtel given more time to increase its local shareholders

Telecoms

Airtel Kenya has won a major concession from the government after the parent company was allowed to continue holding a 95 per cent stake in the second largest mobile telephony firm against regulations that cap foreign ownership at 80 per cent.

Airtel Kenya has won a major concession from the government after the parent company was allowed to continue holding a 95 per cent stake in the second largest mobile telephony firm against regulations that cap foreign ownership at 80 per cent.

The firm was given a three-year grace period in early 2009 to grow its local shareholding to at least 20 per cent after Information minister Samuel Poghisio granted businessman NaushadMerali exception to sell 15 per cent of the 20 per cent stake he held in then Zain Kenya to Kuwait-based Zain Group.

The Kuwaiti firm sold its stake to India’s BhartiAirtel in June 2010 and handed the new owners the responsibility to either search for local shareholders or seek an extension in the first quarter of this year.

Airtel says it has been granted extension on the strength that it is yet to settle in the loss-making Kenyan business — a move that will halt the jockeying for the stake among local businessmen.

“BhartiAirtel has in accordance with the government policy obtained the requisite exemption from local shareholder requirements,” said ShivanBhargava, the chief operating officer of Airtel Kenya.“Airtel is committed to always comply with the requirements of the government policy.”

Airtel did not disclose the period of the extension, but sources at the Communications Commission of Kenya said it will run for three years or until 2015.