The sale of Telkom Kenya continues to lurch from one controversy to the next following revelations that the company that will now buy a 60 percent stake did not have any online presence until last month.
The ownership of the Dubai-based company that will inherit the stake in Telkom Kenya from PE fund Helios Partners remained scanty with Treasury and other government officials remaining cagey. Also, details of the bidding process that landed the Emirati company its first known investment on the continent were not provided by the Treasury by the time of going to press.
There is also lingering uncertainty over the actual amount due to be refunded to the government by the PE fund, which held the Telkom stake via Mauritius-based subsidiary Jamhuri Holdings Ltd.
Infrastructure Corporation of Africa (ICA) was revealed via a Treasury press release on Wednesday as the preferred bidder for the Telkom stake. This followed the disclosure in a Tuesday Cabinet brief that the government had decided to rescind the 2022 decision to purchase the stake from Helios for a total consideration of Sh6.1 billion.
A top lawyer familiar with the deal said that earlier discussions had resolved that the new investors would take over the liabilities of Telkom and leave Helios to keep the Sh6.1 billion since it was reimbursement for loans the private equity firm had given Telkom.
This prompts the question of what amount Helios is meant to refund the government following the reversal of the earlier deal and the fact that Helios sold the 60 percent stake to the State for $1 (Sh148) based on documents tabled in Parliament.
The UK-based fund also forwent $239 million (Sh35.48 billion) it inherited from Orange in 2016 when it bought a 70 percent stake from the French telecoms operator.
Details on the bidding process also remained scanty, with the public only learning this week that the government had been looking for new investors in Telkom for at least nine months.
In the Wednesday release, Treasury Cabinet Secretary Njuguna Ndung’u said that ICA was selected following a competitive process set in motion in January this year once a decision to recall the Helios deal was made.
An evaluation process recommended ICA to be the new majority owner of Telkom, based on its offer to the government.
The Treasury, however, did not mention the number of firms that made bids, and whether the Helios deal had been concluded and the Sh6.1 billion paid to the fund prior to the reversal of the sale. Queries sent to the Treasury on further details of the deal went unanswered by the time of going to press.
The initial deal, which was concluded in the sunset days of the Jubilee administration, came under scrutiny once the Kenya Kwanza administration took office after disclosures to Parliament by Controller of Budget Margaret Nyakang’o that she refused to authorise the withdrawal of the billions to pay for the stake.
Helios had sought to exit the investment after the refusal by the government to approve a proposed joint venture between Telkom and Airtel Kenya, which allegedly caused the former to suffer a loss of $200 million.
ICA also failed to respond to questions submitted via the contact channel it has provided on its website about the financial details of its planned investment, the treatment of Telkom’s liabilities that it is willing to take over, as well as other investments it may have made around the world. (First published in Business Daily)