By Morris Aron
Essar Telekom Kenya has denied claims that its parent company – Essar Group of India – is selling its stake in the company. It instead said the firm is in the country for the long haul.
Management of the local arm added that the firm is ‘bullish’ about local telecoms business. It is even interested in participating in a public private partnership venture of putting up a planned fourth generation (4G) network.
There have been reports this week that Essar Group is planning the sale of its stake in mobile operator Essar Telecom Kenya, which operates as YuMobile, and has in fact hired French financial institution BNP Paribas to facilitate the sale of its Kenyan unit.
The management of the Kenyan telecom unit however said Essar of India is not in plans to sell its share of Yu Mobile and instead had contracted PNB Paribas to help the Kenyan mobile operator raise funds to expand its infrastructure.
Sh40 billion investment
“yuMobile has invested more than Sh40 billion in the Kenyan Telecom business. We intend to continue investing in the business to meet increasing demand for our services while expanding our network, as well as our commitment to investing in LTE (4G) in Kenya along with Government,” said Madhur Taneja, Essar Telecom Kenya country manager.
“To meet these future investment needs, we are evaluating an opportunity to raise capital and BNP Paribas has been appointed for the purpose.”
Essar Group owns a 72 per cent stake in the Kenyan unit and stands out as the only mobile operator being run by the Indian giant, which divested from the mobile telephony industry last year.
It has been doing away with its mobile telecommunications business in other markets including India, where it sold its 33 per cent stake in Vodafone Essar, which had been a joint venture with UK’s Vodafone. It also sold stake in Warid Telecom that operates in Uganda and Congo and Taneja who was overseeing Warid was moved from Uganda to Kenya to man yuMobile.
The pan African infrastructure Development Fund is the other shareholder is Essar Telecom Kenya.