Dear Members
The Kenyan government is in the process of looking for
an investor to buy
off 40% of Telkom Kenya shares. The current bidders
which they say is the
highest is giving 5.6Billion Kenya Shillings. This is
an amount which we,
stakeholders in the IT sector in Kenya feel is less
than the amount the
corporation can fetch when privatised.
This
makes us think that the best way the Kenyan government can sell
the
corporation at the right price is by listing it in NSE. It would be
good for
the strategic National interest for Telkom Kenya to remain in the
hands of
Kenyans and only around 8% shares be sold to a foreign investor or
a maximum
of 10%. Why should we be selling all our state corporations to
foreigners.
We cannot allow this and must stand up to this. Telkom
Kenya is a very vital
corporation which must either remain in the hand of
Kenyans or be sold to
individual of corporate Kenyan investors but not what
is currently
happening. Why is the government not ready to list telkom
Kenya in the
bourse? What is the rush to sell to an outsider.
We
must never allow this. Please click the following link and sign
the
petition. We must never allow Telkom Kenya to be owned that much by
foreigners. 40% is just too much. Please sign the petition
http://www.petition
Please dont let your country down. We must never allow Telkom
Kenya to go
that far at that less amount. Its just too
cheap.
Robert Alai Onyango
IT Stakeholder Kenya
On
7/8/07, yamanjanl < yamanjanl@yahoo.
>
> BT EMERGES FRONTRUNNER IN RACE TO BUY
TELKOM KENYA, ACCORDING TO GOVT
> OFFICIAL
>
> A consortium
that includes British Telecoms and Libyan investors has
> emerged as the
only strong contender to acquire a strategic 40 per
> cent shareholding
in Telkom Kenya. People close to the matter told
> the Business Daily
that senior officials from BT and Libyan investors
> on Friday met top
Treasury and Ministry of Communication officials to
> work out the
deal's finer details. Treasury estimates the stake to be
> worth Sh5.6
billion —meaning that Telkom Kenya is now valued at Sh14
>
billion.
>
> The British firm is said to have tabled a number of
proposals,
> including a strong financial bid as commitment to finance
the
> turnaround of Telkom Kenya, in the meeting that ended at 11.30
pm.
> Such a high level leak means that the Government is doing its best
to
> talk up the price that will be paid for Telkom Kenya.
>
> "The consortium led by BT is the team to beat. They have a
credible
> technical group and have the finances," an official, who
attended the
> meeting, said. It is the second time that the Government
is trying to
> sell a significant portion of its stake in Telkom Kenya,
the first
> attempt having flopped after bidders placed financial bids
that they
> ultimately could not back up with real
money.
>
> The Government had this time around included a
condition that
> required bidders to have an annual revenue of $200
million (Sh14
> billion), more than 500,000 voice subscribers and
demonstrated
> experience in the deployment of broadband to avoid
similar flops.
>
> In recent months, Libyan firms, loaded with
petrodollars, have been
> clinching lucrative deals in Kenya mainly on
the infrastructure front
> including the upgrade of Kenya Petroleum
Refineries. This has
> cemented close trade ties between Kenya and
Libya that was recently
> pushed by President Kibaki's official visit to
Tripoli.
>
> The Government intends to sell its 40 per cent stake
to a strategic
> investor who is expected to come on board before the
end of the year.
> Analysts say that BT has been desperate to get a
foothold in the
> lucrative Eastern African market through an
acquisition, a pointer
> that the Telkom deal would turn their dream
true.
>
> Already, BT is well represented in the rest of the
continent with its
> regional headquarters in South Africa to the
Southern part of the
> continent. For the North African market, it has
the Libyan office and
> the Nigerian office to serve the West African
market.
>
> "Safaricom has shown there is money to be made in this
part of the
> world and everyone is now looking at getting a share of
the market,"
> James Rege, chairman, Capital Real Time, a
telecommunication
> consulting firm.
>
> Safaricom broke
its earlier record to emerge as the most profitable
> firm in the East
Africa posting Sh17.7 billion in profits, an
> increase of 39 per cent
recorded a year earlier.
>
> With Telkom already in the wireless
voice market through their new
> service offering dubbed Telkom
Wireless, which is set to be
> officially launched this Thursday, this
could be big opportunity for
> BT to take a stab at a growing
market.
>
> Rege, a former permanent secretary in the information
ministry, said
> BT looked the most credible firm to clinch the deal
should it come
> through. This is not the first time the British
telecommunications
> giant has made a bid at Telkom Kenya. Six years
ago it indicated its
> interest in acquiring the state firm but it was
disqualified during
> the preliminaries.
>
> Other firms
that are in the race to buy the stake include Indian
> mobile service
providers Bharti Airtel, Reliance Communication, Tata
> Holdings and
Vtel communication, who had won the licence to become
> the country's
Second National Operator but were disqualified after
> failing to raise
the required license fee.
>
> American telecommunication giant
AT&T pulled out of the race after
> the Government failed to buy
into its demand where it indicated it
> would only buy a stake in the
state firm if they were given a 51 per
> cent stake. This, they noted,
was the only way they could get a free
> hand to turnaround the
loss-making company.
>
> South Africa-based Econet is also making
a second attempt to enter
> the Kenyan telecommunications industry
having won a licence for the
> third mobile phone operator that is
subject of litigation. The recent
> attempt has seen potential bidders
demand that the Government
> increases the 26 per cent stake it had
initially planned to sell for
> them to consider the offer. But this
has since changed as the stake
> to be bought by the strategic partners
has been increased to 40 per
> cent and the government holding will
stand at 49 per cent.
>
> The remaining 11 per cent will be
reserved to be sold to the public
> through the Nairobi Stock Exchange.
Telkom is currently deemed to be
> unable to pass the Capital Market
Authority (CMA) listing test. CMA
> regulations require that any firm
keen on listing at the NSE must
> have posted profits for at least
three in the five years to the
> listing.
>
> But Telkom
Kenya has been making losses for years, weighed down by
> huge staffing
levels and growing competition from the wireless voice
>
market.
> Figures sent to the potential investors show that Telkom
financial
> performance has been declining over the last four years.
>
> Its turnover has been declining at an annual rate of 10.5 per
cent
> over the last three years as competitors eat into its market
share to
> settle at Sh16.3 billion in 2006 from Sh20.9 billion in 2003.
>
> The firm notes that it expects to make a loss of Sh1.18
billion,
> which is a reduction from last year's figure of Sh2.7
billion.
> While the special shares reserved for the public will be held
in
> trust by the Government, dividend payouts from Telkom Kenya will
> stream straight into the State coffers.
>
> According to
Dr Bitange Ndemo, permanent secretary Ministry of
> Information, the
revision had been informed by the need to go around
> the State
Corporation Act in a move that was aimed at making the deal
> more
suitable to strategic investors.
>
> Had the strategic investor
held a minority holding at 26 per cent and
> the Government holding a 64
per cent stake, Telkom Kenya would not
> run as a private company, but
under the Act which guides the
> operation of
parastatals.
>
> At the moment the government is racing to clean
Telkom debt ridden
> balance sheet as it prepares to bring the strategic
partner on board
> as well as strike a better deal in the sale of the
40 per cent stake.
> The Government has already committed Sh26 billion
to fix the pension
> and tax arrears with pensions taking Sh10 billion
and the remaining
> Sh16 billion being taken by Kenya Revenue
Authority. To keep the
> state firm afloat, the firm is set to complete
a massive staff layoff
> that will reduce its work force to 3, 200
members down from 17, 000
> by the end of August.
>
>
According to Permanent Secretary Bitange Ndemo, BT have also
>
expressed interest in investing in the TEAMS fibre project.
> (SOURCE:
Telegeography)
>
>
>
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Life's
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.........Martin
Luther King, Jr.
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