State completes full acquisition of Telkom after Helios sells 60% of its stake

The government has purchased a 60% stake in Telkom Kenya from Helios Investment Partners, a UK-based private equity group, for Sh6.09 billion, making the company wholly State-owned.

According to documents filed in Parliament, the purchase was one of a series of expenses paid by the Treasury without the approval of Parliament in the weeks leading up to President William Ruto’s inauguration on September 13.

The transaction represents an unprecedented return of a privatized corporation to state ownership, delaying Telkom Kenya’s initial public offering (IPO) on the Nairobi Stock Exchange (NSE) (IPO).

The transaction values Telkom Kenya at Sh10 billion, which is one percent of Safaricom’s Sh1 trillion worth.

According to a top Treasury official, the State used its pre-emptive rights when Helios informed the government of its intention to depart Telkom.

Helios Investment Partners, a UK private equity firm, announced on June 10, 2016, the acquisition of a 60% stake in Telkom Kenya by Jamhuri Holdings Limited (JHL), a company controlled 100% by HeIios Investors III, L.P. The acquisition also included an increase in the Government of Kenya’s (GoK) ownership in Telkom Kenya from 30% to 40%.

According to Business Daily, Helios informed Telkom that they were no longer interested in the venture after the Airtel agreement fell through.

In August 2020, the operator announced that it will no longer pursue a merger with Airtel, citing difficulties in obtaining the necessary regulatory licenses.

The merger would have produced a more formidable competitor for Safaricom.