NAIROBI, Kenya, Jun 8 – The government plans to increase shareholding of its stake at Telkom Kenya, owners of the Orange Kenya brand, from the current 30 percent to 40 percent.
Treasury Cabinet Secretary Henry Rotich says this is part of the government plans in rehabilitating struggling parastatals.
Speaking when presenting the 2016/2017 Budget estimates in Parliament, Rotich says the move is aimed at turning around the company to profitability.
In November last year, private equity firm Helios Investment Partners sealed a deal with Orange Group for finalising the purchase of 70 percent stake at Telkom Kenya.
“We expect the new investor to turnaround the fortunes of the company so that it will be a sustainable business capable of competing effectively in the communication sector,” Rotich said.
Telkom Kenya’s partnership with Orange Group (formerly France Telecom Group), saw the launch of the Orange brand in Kenya in 2008.
Orange Group started with a 51 percent stake which was topped up to 70 percent in January 2013.
Its departure from the Kenyan market marks its exodus out of East Africa having exited the Ugandan telecommunications industry.
The French company has however not quit the African market entirely as it retains operations in South Africa, Botswana, Cameroon and Democratic Republic of Congo among others.
Helios – an Africa focused serial investor company – has in the past invested in Equity Bank which it later sold, has been courting the French for the Orange stake buyout from as long as last year.
Helios has in the past bought stakes in companies such as Africa Oil Corp which is exploring oil in the country, it also invested in Wananchi Group Holdings, ARM Pensions, Vivo Energy and Flamingo Holdings among others.
Other parastatals to benefit include Kenya airways and Mumias Sugar which has been allocated Sh2 billion in the 2016/2017 financial year in order to support the revival of the firm.
“We are working to ensure that Kenya airways turns around its financial position and it’s able to play its role in our economy especially as a key asset supporting our tourism and transport sector,” he stated.