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Bharti Airtel Required to Sell 15% Stake in Kenyan Subsidiary
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India's Bharti Airtel has until next April to find a Kenyan to buy a 15% stake in Aitel Kenya to remain compliant with local regulations on foreign ownership.
The government has a rule that locals must own at least 20 percent of any telecoms network operator. Although Bharti Airtel owns 80% of the company, the other local shareholder, Naushad Merali was given permission to sell 15% of the company to foreign shareholders.
He retained a 5% stake in the company, leaving 95% owned by foreigners.
As a consequence, Bharti Airtel was given a 3-year grace period to find another local shareholder to sell a 15% stake to. That deadline expires in April 2013, and the company has been told that the deadline will not be extended.
"Airtel will be required to comply with the ownership policy at the expiry of the waiver period," Francis Wangusi, the CCK director general told Business Daily.
The 15 percent stake is now estimated to be worth Sh5.3 billion (US$61 million), and Bharti Airtel is seeking some leniency due to the difficulty in finding a local investor able to buy the stake, especially as the mobile network is not yet turning a profit.
On the web: Business Daily
Tags: [bharti airtel] [Kenya]
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