Essar sells telecom business in Kenya for $120m

Tags: News
Essar today said it has sold its telecom business in Kenya to Safaricom and Airtel for approximately $ 120 million.

Essar Capital, the fund manager of Essar Global Fund Ltd (EGFL), which through its portfolio company Essar Telecom Kenya Limited, operates the yuMobile telecom service in Kenya, today announced the signing of binding agreements with Safaricom and Airtel for sale of its telecom business in Kenya for approximately $ 120 million.

The divestment will see Safaricom take over Essar Telecom's network, IT and office infrastructure while Airtel will acquire the company’s subscribers.

Essar Capital said the transaction has received approval from the Communication Authority (CA) in Kenya and it will now be filed with the Competition Authority of Kenya (CAK) for approval. The company expects the transaction to conclude during the fourth quarter of 2014.

"We have structured the transaction such that our customers will not need to change their mobile numbers or sim cards, post this transaction," yuMobile's Chief Executive Officer Madhur Taneja said.

Taneja added that close to 90 per cent of the yuMobile's employees will be absorbed by Safaricom and Airtel.

The divestment of Essar Telecom represents Essar Global Fund's second significant portfolio exit in the last few months, following the

sale in July of its US-based outsourcing company, Aegis US, to Teleperformance for $ 610 million.

In March 2011, Essar exited from telecom business in India by selling its 33 per cent stake to Vodafone in Vodafone Essar, now Vodafone India, for $ 5.2 billion.

EDITORIAL OF THE DAY

  • RBI must now educate investors on the benefits of debt market

    It is uncommon for the central bank to act on a policy decision within a week of submission of a specialist report.

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Urs Schoettli

Japan needs more women in high office

Japan does not rank high in international tables, when it ...

Kuruvilla Pandikattu

Giving up faith is a complex act

We have met many people who have given up religion ...

Shona Adhikari

Belated recognition of women in America's modern art movement

This week we focus on a very important exhibition that ...