Kenya invited expressions of interest on Wednesday from companies seeking to buy a 26% stake in Telkom Kenya, a state-owned landline company, as a strategic partner.
In a newspaper advertisement, the government said it also intended to sell off a further 34 percent of Telkom in an initial public offering once the strategic partner was on board.
”The government of Kenya … intends to privatise Telkom Kenya, the incumbent fixed line telecommunications operator … to a strategic equity partner who may be a qualified operator, financial investor or consortium of investors selected through a competitive tender,” the statement said.
The winner will be announced on September 25 and an agreement signed on October 17, according to a privatisation timetable posted on Telkom’s website.
Telkom is the country’s sole landline provider. It had just 280 000 lines at the end of 2006 compared with about 8-million mobile subscribers countrywide, according to the website.
Telkom’s website also said the company planned to hand the government its 60% shareholding in the country’s leading mobile firm, Safaricom, to allow the landline company to compete effectively against its former subsidiary. Vodafone Group owns the other 40% of Safaricom.
Telkom has launched a wireless CDMA service and expects to roll out full mobile services in the second quarter of 2007.
Telkom has been making losses mainly due to a bloated work force and increased competition, but the company intends to lay off 13 800 of its 17 000 workers by the end of June.
It made a $45-million pretax loss in 2005 compared with $18-million in 2003. Unaudited 2006 results showed a pretax loss of $16-million.
The industry’s regulator this month cancelled the award of a second national operator licence to an Kenyan-Indian company, Reliance, the second highest bidder, after it failed to make a formal application in time.
Dubai-based VTEL had won the tender but was disqualified after it also failed to marshal the $169,7-million it had offered with its local partner before the deadline provided. – Reuters