France Telecom-Orange’s decision to convert its Telkom Kenya debt into equity has cut the government’s stake in the firm by nine percentage points, Business Daily Africa writes, leaving the French giant with a controlling 60% stake. ‘Our voting rights in Telkom Kenya will be weakened, but we are working on whether it’s prudent to inject more cash in the firm to return our stake to 49%’, government finance minister Njeru Githae revealed. The Treasury is weighing the opportunity cost of keeping the government’s shareholding in the company at 40%, with Githae adding: ‘If we find that the effect is small or zero we will be comfortable with lower a stake’.
According to TeleGeography’s GlobalComms Database, Telkom Kenya was wholly state-owned until November 2007. That month France Telecom (FT, but now known as France Telecom-Orange) was named as the winning bidder with of a 51% stake. FT acquired the stake as part of a 78.5%/21.5% consortium with logistics group Alcazar, which is known as Orange East Africa (OrEA).