Safaricom, Kenya’s largest mobile operator by subscribers, is asking the High Court to temporarily block the sale of Orange Group’s 70% stake in Telkom Kenya to Helios Investment Partners, over concerns that it would not be able to recover KES639.8 million (USD6.1 million) it is owed by Telkom Kenya if the deal goes ahead. According to Standard Digital, the outstanding debt is due to unpaid interconnection fees and some liabilities inherited from Telkom’s tower sharing deal with defunct cellco Essar Telkom Kenya (yu), the network infrastructure of which was acquired by Safaricom in December last year. Safaricom has asked the court to temporarily block the sale until Telkom can pay the debt or provide a bank guarantee that the debt can be paid.
As previously reported by CommsUpdate, last month Orange Group announced the signing of an agreement with African private equity firm Helios Investment Partners for the sale of its entire 70% stake in Telkom Kenya, the country’s incumbent fixed line and mobile operator. The completion of the transaction remains subject to approval from the relevant authorities. The announcement came a year after an attempt to sell Orange’s majority shareholding in Telkom Kenya to Viettel Group fell through. The Vietnamese telecoms firm reportedly pulled out of the deal after the Kenyan government – which owns the remaining 30% of Telkom – rejected a number of its conditions for the deal.