The Sh6 Billion Telkom Kenya Buyout Deal: Ruto Government’s Reversal

Under the leadership of President William Ruto, the Kenyan government has surprisingly made a significant decision about its Sh6 billion buyout deal with Helios for Telkom Kenya. This action stirs substantial buzz and controversy within Kenya’s telecommunications and financial sectors. This article will dissect this decision, its implications, and provide an in-depth backstory.

In July 2022, Helios – a private equity fund based in London – initiates the story by choosing to divest its investment from Telkom Kenya. The execution of this exit occurs via Jamhuri Holdings: a special purpose vehicle. The decision that propelled Helios towards this strategic move rooted from an available put option within their purchase agreement; fundamentally permitting them to offload their stake, should certain policy and regulatory interventions fail realization. The government’s failure to fulfill commitments, which were expected to enhance Telkom Kenya’s commercial viability, primarily drove this move.

Helios received a substantial payment of Sh6.091 billion as part of this exit; however, the Controller of Budget flagged it for potential non-adherence to constitutional provisions regarding supplementary budget expenditures – an action that certainly garnered attention and scrutiny.

March 2023 catapults us into a scene of remarkable reversal under President Ruto’s government. During a Cabinet meeting, they opt to rescind their prior decision made in July 2022 – the purchase of 60% ordinary shares from Jamhuri/Helios for Telkom Kenya. This strategic shift carries profound implications not just for Telkom Kenya but also influences the overall telecommunications market within Kenya at large.

The government’s desire to confront the governance challenges that emerged from Telkom Kenya’s nationalization before the previous year’s General Election stands as a primary reason for this reversal, according to critics. The pivotal role in this decision was also played by some of the government’s actions – notably, it expropriated valuable property along Ngong’ Road in Nairobi. Without any commitment or payment of compensation, they took possession of approximately 79 acres worth over Sh10 billion without obtaining consent from either Telkom or Jamhuri Holding Ltd.

The government’s decision to cancel the buyout deal grants Telkom Kenya a significant opportunity: pursuing a new strategic investor. This potential infusion of capital and support could bolster its future growth and expansion plans; moreover, it allows the telecommunications company to revitalize–not merely sustain–its operations and competitiveness in an evolving market.

Not content with merely reversing the buyout deal, the government insists on a refund from Helios for their Sh6.091 billion transaction–completed just one month prior to the August 2022 general election; this demand introduces an additional layer of complexity into our current situation.


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