Kenya’s largest private data carrier and network provider the Kenya Data Networks (KDN) is finalising plans to sell a substantial part of its stake to an external investor, as it tries to recover from its losses in the face of stiff competition.
South Africa’s Altech, which owns 60.8 percent stake of the company, says that it is looking for new capital to bolster its Kenyan operations.
“We have identified a number investors and the matter will be made public within the next two to three months as the firms are still conducting due diligence,” KDN’s chief executive Shahab Meshki told Business Daily.
The company’s revenue dropped to KSh2.1 billion from Ksh3.2 billion for the six months ended August last year, prompting the decision to sale off part of its stake by December this year. However, whether the company will create new shares to accommodate the new investors or not is yet to be revealed.
“External market conditions and internal operational challenges within KDN continue to impact negatively on the performance of the operation resulting in it performing below budget and incurring losses,” Altech CEO Craig Venter said in a statement.
Venter said that the major focus for the company will now be to grow the revenue line, reduce customer churn and manage expenditure.
KDN’smarket share in Kenya based on the number of subscribers dropped to 30.2 percent from 36.2 percent as at September 2011. However, Communications Commission of Kenya (CCK) still placed KDN as the top internet firm in Kenya, ahead of Wananchi and AccessKenya, who hold a 24 percent and 15 percent of the market share respectively.