Nigeria’s Megatech Engineering Limited has emerged the top bidder for a 70 percent stake Telkom Kenya, beating off competition from international firms including a Vietnam and a British Consortium.
The Nigerian firm placed a bid of Sh25 billion ($280 million), while an unnamed British Group placed a bid of Sh16.3 billion ($185 million) and Vietnamese company, Viettel proposed Sh10.6 billion ($120 million).
France Telecom had in March appointed Lazard, a global financial advisory firm to help it find buyers for its telecoms business in Kenya and Uganda. Lebanon group Africell bought its Ugandan business, Orange Uganda in May.
Several companies were said to have also placed offers for Telkom Kenya including Angola’s Unitel, but UK-based online media TMT Finance last week reported that the French company was yet to find a prospective buyer with an offer matching its expectation.
“It is thought that Lazard is still seeking offers for the (Kenyan) unit, and is not yet holding advanced negotiations with any one party, with current bids much lower than the seller’s expectations,” a brief by TMT last week said.
TMT reported Viettel as being considered one of the favourites for the Telkom Kenya deal, but the Nigerian company’s bid might have just raised the stakes.
The online publication said the Kenyan unit will be difficult to sell as the licence conditions require the buyer to be a well-established operator. Emphasis would also be laid on the financial capability of the new investor and on how much it would be ready to put into the business once acquisition is complete.
The financial status of the Megatech cannot be immediately verified as company details on the internet are sketchy, with the contact number on a brand (Zoda Fones) associated with the company unreachable. The company was however considered in a Telecoms, Mobile, Broadband and Forecasts report recently released by telecommunications research site, budde.com.au.
Any company that gets the deal will have to work with the government of Kenya, owner of the remaining 30 percent stake.
Telkom Kenya has been making loss over the years, with revenue declining to Sh9.7 billion ($111 million) in 2013 from 2012’s Sh10.2 billion ($116 million), as stated in Orange Group’s financial results released last week.
The new owner will apart from working to return Telkom Kenya to profitability have a legal tussle on its hands as 943 former employees request a Sh2 billion ($22.8 million) severance pay from the telco. Another group went to court in April asking for a restraining order to stop the sale of the company or any of its assets. (VENTURES AFRICA)