The government’s decision to hive off property valued at Sh10 billion from Telkom Kenya’s balance sheet without the knowledge of Helios Investment Partners is one of
the factors that prompted the private equity fund to initiate its exit from the struggling telecommunications firm in 2021.Documents seen by Business Daily show that this was one of the two major developments that prompted the private equity fund to exercise its contractual right requiring the government to buy its stake.
“The government of Kenya proceeded to unlawfully expropriate the prime property of Telkom Kenya Limited situated along Ngong’ Road Nairobi measuring approximately 79 acres valued at over Kes 10 billion without Telkom’s or Jamhuri Holding Ltd.’s consent and without any compensation being committed or paid," the letter from Paul Cunningham dated March 20, 2023, addressed to the Office of the Clerk of the National Assembly reads.
Read: Kenya gets 10pc Telkom stake for free as part of Helios' deal
Mr Cunningham is a director at Jamhuri Holding Ltd which is the special purpose vehicle that was set up by Helios for its investment in Telkom Kenya Ltd in June 2016.
It has also emerged that the failure to consummate the joint venture between Telkom Kenya and Airtel Kenya in 2019 was also another major factor prompting the exit of Helios.
Documents show that it had been expected that the joint venture arrangement would scale down the need for further capital injection by Jamhuri Holding Ltd into Telkom Kenya.
“There were considerable delays in securing regulatory approval for the merger transaction, in part attributable to protracted investigations launched by the Ethics and Anticorruption Commission on Telkom Kenya and its officials on various matters which were ultimately dropped with no adverse findings," Cunningham’s letter states.
According to the letter, Telkom Kenya allegedly suffered a loss of $200 million (Sh26.1 billion) due to the government's failure to approve the proposed merger with Airtel through its agencies such as the Competition Authority of Kenya.
Mr Cunningham states that the Kenyan government acquired the 60 per cent stake in Telkom Kenya through a series of transactions including taking over shareholder loans that were first provided by French telecommunications firm Orange. Helios bought its stake from Orange.
Helios also received a payout from the government, with the PE firm saying it did not make a gain from its investment in Telkom Kenya when it exited.
“The transaction between Jamhuri Holdings and the government of Kenya was completed on August 12, 2022, following receipt of $51,186,058 (Sh6.6 billion at current exchange rates) by Jamhuri Holdings from the government of Kenya and delivery of the duly signed transfer documents from Jamhuri Holdings,” the letter says.
Read: State fully acquires Telkom Kenya in Sh6.09 billion deal
“Therefore, in summary, Jamhuri Holdings obtained no more than the money it had invested directly into the business since it became a shareholder and the government of Kenya received all of Jamhuri Holdings’ shareholding and all the indebtedness owed by Telkom Kenya to Jamhuri Holdings.
→jamboko@ke.nationmedia.com
No comments :
Post a Comment