Telkom targets Sh1bn from assets fire sale across country

Corporate News

Orange Telkom Kenya CEO Vincent Lobry. PHOTO | FILE 

By OKUTTAH MARK, mokuttah@ke.nationmedia.com

In Summary

• Move comes at a time when Telkom Kenya’s majority owner, France Telecom, is shopping for a potential buyer of the 70 per cent stake it owns in the company.

Telkom Kenya has stepped up the sale of its assets with a listing of 17 properties across the country that are estimated to be valued at Sh1 billion.

The fire sale comes at a time when Telkom Kenya’s majority owner, France Telecom, is shopping for a potential buyer of the 70 per cent stake it owns in the company.

The firm on Tuesday confirmed to the Business Daily that it is selling the properties spread across the country in major cities and towns including Nairobi, Kisumu, Nyeri, Nakuru Gilgil, Nambale, Moiben and Malindi.

Top on the list is a three-storey building located in Kisumu that Telkom Kenya is selling for Sh260 million. Another 1.733-acre plot in Embakasi, Nairobi, that is partially developed is being sold for Sh146 million.

A five-storey building in Karatina, Nyeri is also up for sale at a cost of Sh120 million while another building on the Nyeri-Nanyuki Road is quoted for sale at Sh108 million.

Telkom Kenya refused to disclose to the Business Daily what it intends to do with the cash raised from the sales.

“Any transactions, alleged or real, carried out by Orange Telkom Kenya, are a private matter and therefore cannot be discussed in public domain,” said Telkom Kenya in response to Business Daily queries.

READ: Helios offers to buy French firm stake in Telkom Kenya

The telco has previously said that the property sale is expected to boost cash reserves that have been eroded by rising competition and low tariffs in an increasingly competitive market. Telkom Kenya is owned 30 per cent by the government.

It has lately been relying on the Treasury for bailouts to settle debts and pay salaries – with the latest being a nearly Sh600 million injection early in the year.

Telkom Kenya is also looking for buyers of 11 bungalows located in Gilgil town that lie on a four-acres piece of land all valued at Sh73.5 million. Other properties put up for sale include an open plot in Malindi valued at Sh78.5 million.

Early this year, Telkom Kenya received a Sh588 million bailout from the Treasury to pay salaries and settle pending bills. The amount was advanced by the Treasury through a supplementary budget tabled in Parliament in December.

According to the Treasury, the December bailout was to be spent on staff salaries (Sh90 million), Sh338 million for pending bills, including travel agency fees and another Sh110 million for unspecified expenses