Helios Exit Leaves Emirati Company with Major Stake in Telkom

The newest development in the deal room of the losing telecom is that a company from the United Arab Emirates (UAE) will acquire a controlling stake in Telkom Kenya from Helios Investment Partners of London.

Following a competitive process that began in January 2023, the Treasury said on Wednesday that it has chosen Infrastructure Corporation of Africa LLC (ICA) of the UAE to be the new majority shareholder in Telkom Kenya.

Hours earlier, the Cabinet had reversed the decision made in July of last year, when Helios paid Sh6.09 billion to exit the telco, and had ordered the London-based private equity fund to reimburse the government for the sum.

On August 5, 2022, the Treasury withdrew Sh6.09 billion and paid Jamhuri Holdings Ltd, a Helios subsidiary domiciled in Mauritius, in a deal that was not approved by parliament.

In light of the most recent development, Helios will have to reimburse the Kenyan government for Sh6.09 billion before selling its 60 percent ownership to the UAE company directly. This will spare the government the formalities involved in selling Telkom as a parastatal.

“Government of Kenya (GoK) will work with Jamhuri/Helios to transfer their 60 percent shareholding directly to ICA. This process will inevitably require rescinding of the transaction documents already signed between GoK and Jamhuri/Helios, among other necessary actions,” said Njuguna Ndung’u, the Treasury Cabinet Secretary.

According to the Treasury, the UAE company will invest money in Telkom to pay for crucial infrastructure, a general upgrading of the organization’s capabilities, and the settlement of some outstanding liabilities.

As part of its duties as a minority shareholder and a significant user of the telco’s services, the government will also invest money in the company. Additionally, it has pledged to implement unnamed reforms in the telecommunications industry.

“GoK as a critical stakeholder will pursue the actualization of regulatory reforms that are necessary to correct the structural imbalance in the telecommunications industry for the benefit of all stakeholders, key of whom is the public as a consumer,” said the Treasury.

Concerns about the way Helios would have returned the money without resuming its position as Telkom Kenya’s majority stakeholder just a year after leaving owing to displeasure with various State measures involving Telkom were allayed by the Treasury’s disclosures.

These include the government’s decision to reject a proposed joint venture between Telkom Kenya and Airtel Kenya, which it saw as being vital to assist them compete with Safaricom, the market leader.

The government’s move to expropriate Telkom’s 79-acre prime property on Nairobi’s Ngong Road, valued at more than Sh10 billion, in order to build a sports complex also irked Helios.