KENYANS TO GET 34 PERCENT OF TELKOM IN IPO
The public will be offered a share of Telkom Kenya before the year ends. The Government yesterday said it will sell 34 per cent of its stake in the parastatal through the Nairobi Stock Exchange.
A further 26 per cent will be sold to a strategic partner before the other shares are sold to the public. The partner can either be a qualified operator, a financial investor or a group of investors, the ministry of Finance said in the statement released yesterday.
According to the statement, the shares will be offered to Kenyans through an initial public offer (IPO). Information and Communication minister Mutahi Kagwe yesterday said the transactions will be have been finalised by the end of the year.
But before the proposed sale, the corporation will hand over the ownership of its mobile phones arm, Safaricom, back to the Treasury. Kagwe said Kenya has to move fast to ensure efficiency in the telecommunications sector and exploit its enormous benefits "because they will not last forever".
Telkom's privatisation will be similar that of Kenya Airways. The parastatal will first seek a strategic partner to boost public interest and confidence ahead of the IPO.
After the sale, the Government will become a minority shareholder with about 40 per cent stake. "We need to move fast since we are playing catch-up with our competitors," the minister said. Every stage of the process will be advertised to give all interested parties a fair chance and ensure transparency.
World Bank's International Finance Corporation will be retained as the transaction advisor. The corporation has been involved in the sale of most of the Government's shares in parastatals. Once a suitable partner is found, a management structure will be agreed on with the Government. This announcement marks the formal launch of the privatisation of the telecommunications outfit.