By Dominic imbuga (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons
The Public Investments Committee (PIC) of the Kenyan parliament is asking the Treasury to recover billions which were lost over time at Orange Telkom Kenya.
The Standard reports the PIC wants the Treasury to either increase its shareholding or recover some KSh2.5 billion (US$28.4 million) from the telecommunications firm which had been received from the government as it restructured and recapitalised its balance sheet.
France Telecom currently holds a 70 per cent stake in Telkom Kenya while the government has the remaining stake, which is more than at the initial stage when France Telecom bought a 51 per cent stake.
The Treasury had failed to honour an agreement by the two parties to convert some of the debts into equity. Now it is emerging Orange wants to sell its 70 per cent stake.
“The government should either renegotiate with the aim of recovering a higher shareholding of at least 35.1 per cent in line with its contribution of KSh2.5 billion and the recapitalisation and restructuring agreement or the cabinet secretary, National Treasury should ensure that the KSh2.5 billion that was paid is refunded together with interest at market rate backdated to 1st January, 2013,” said the PIC in the Special Report on Recapitalisation and Balance Sheet Restructuring of Telkom Kenya.
Orange is said to have already given the government its intent for the sale of its shareholding in Telkom Kenya, with a number of firms are in the running, among them Vietnamese state-owned operator Viettel Group, South Africa’s MTN, Nigeria’s Megatech Engineering and an undisclosed UK firm.
