State studying privatisations

1 Mar 2006

The Kenyan government has announced that it is planning the sale of a 9% stake in the country’s largest mobile operator, Safaricom. The government currently holds 60% of Safaricom via the national fixed line operator Telekom Kenya; the remaining 40% is owned by Vodafone and it is likely that the UK-based company will use the opportunity to increase its stake in its Kenyan subsidiary. The timeframe for the sale has not been revealed, but it is thought that the proceeds will be used to help finance Telekom Kenya’s restructuring. Safaricom claimed 3.5 million of Kenya’s 5.5 million cellular subscribers at the end of 2005.

Meanwhile, the government has also revealed that it is considering privatising Telekom Kenya. Reports from local press suggest that 34% of the operator will be offered to the public, while 26% will go to a strategic investor. The government attempted to privatise Telekom Kenya in 2000 through the sale of a 49% stake to a strategic equity partner, valuing the company at USD1 billion, but the Mount Kenya consortium, comprising Econet Wireless, Eskom Enterprises and Canadian firm SaskTel, presented the highest bid of only USD305 million and the process was called off in early 2002.

Kenya, Safaricom, Telkom Kenya