Essar Telecom Kenya Looking for Investors to Stave of Liquidity Crisis
Essar Telecom Kenya has confirmed that it is seeking an outside investor to pump cash into the company to stave off a liquidity crisis.
The company, which trades as Yu has had to delay payments to its suppliers while it resolves its funding problems.
"To finance this expansion and enhance its operations, in November 2012 yuMobile appointed BNP Paribas, who are currently engaging with strategic investors," the company's CEO, Madhur Taneja said in a statement.
"The financing plans, however, fell behind schedule due to foreign investor concern over the political environment experienced at the start of the year. A conclusion is expected by September 2013," he added.
The company is 20% owned by local businessmen Peter Kibiriti and Jos Konzolo, and 80% by India's Essar Group. The company had earlier this year said that it will not deploy a 3G network, but will jump to LTE -- subject to securing shareholder funding.
In related news, rival network, Bharti Airtel is suing the company for US$4 million in unpaid tower lease payments.