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Kenya extends Airtel’s local stake deadline
08 February 2012
Kenyan government grants Bharti Airtel more time to increase local shareholdings in Airtel Kenya
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Kenya
Airtel
Bharti
Zain
shareholding
Safaricom
The Kenyan government has allowed India’s Bharti Airtel to keep its 95% stake in Airtel Kenya for the time being against laws that limit foreign holdings to 80%, reports Business Daily Africa. Airtel said that the extension has been granted on the fact that it is yet to settle in the unprofitable Kenyan units.
The presence of local shareholders could hurt efforts to raise more capital, Business Daily reported. Airtel is struggling to achieve profitability and offer better competition in a market dominated by Safaricom. Experts have indicated that local partners would vie for a stake with intentions to sell these to third parties.
The company had been given a three-year grace time in early 2009 to expand local shareholding to a minimum of 20%. Kenyan information minister Samuel Poghisio had then granted Naushad Merali an exception to divest 15% of the 20% stake he owned in Zain Kenya to the Zain Group. Zain sold its stake to Airtel in June 2010, leaving the Indian group responsible for finding local shareholders.
While Airtel has not revealed the extension period, sources at the Communications Commission of Kenya have told Business Daily that it could be valid until 2015. Based on the $63.75 million Merali gained by selling the stake to Zain, the 15% share could be valued at around $61 million. GTB
Further reading from Global Telecoms Business:
Dimension Data increases Kenya stake 20 Oct 2011
Telkom Kenya launches 3G network 09 Sep 2011
Essar looks to sell operations in Kenya 15 Jun 2011
Safaricom and Orange Kenya in tower deal 14 Jun 2011
Airtel in 3G link with Kenya network 08 Mar 2011