Vodafone Reported to Have Brought Out Controversial Shareholder

It has been reported by local media that Vodafone has brought out its controversial minority shareholder in its Kenyan subsidiary. The Daily Nation newspaper reported that Vodafone may have paid as much as Sh6 billion (US$100 million) for the stake in its local holding company held by Mobitelea.

As we understand it, when Vodafone took its 40% stake in Safaricom back in 2000 - via a local subsidiary, Vodafone Kenya Ltd (VKL) - the company granted an option to a company known as Mobitelea Ventures for 25% of VKL. Mobitelea exercised the option the following year, giving the company an effective 10% stake in Safaricom, and reducing Vodafone's effective stake to 30%.

It then seems that Vodafone brought back half of Mobitelea's stake at the beginning of 2003, giving Mobitelea an effective 5% stake in the company - and Vodafone 35% of Safaricom. Mobitelea is registered in the offshore tax haven of Guernsey.

Following a stock market floatation last year, the Kenyan government owns 35% of Safaricom, 25% is floated on the stock exchange and Vodafone Kenya owns the remaining 40%. Vodafone PLC claims a 35% "economic interest" in Safaricom, though its 87.5% stake in Vodafone Kenya - which in turn owns 40% of Safaricom.

The transaction does not answer questions as to who were the ultimate owners of the shares and why Vodafone entered into a deal with the mystery company in the first place.

On the web: Daily Nation

Posted to the site on 8th July 2009