Telkom Kenya Seeks More Money from Kenyan Government and Orange
Published on: 3rd Jun 2013
Note -- this news article is more than a year old.
The Kenyan government may be asked to inject a further Sh6 billion (USD70 million) into the financially troubled Telkom Kenya in order to preserve its 49% stake in the company.
The Daily Nation newspaper reported that it has learnt that loss making Telkom Kenya has just written to its two shareholders -- the government of Kenya (49%) and Orange-France Telecom (51%) -- requesting a Sh13.9 billion cash injection.
The company reported a loss of Sh7.9 billion last year, and is struggling to roll over debts, many of which now come with a maximum duration of just 90 days as creditors worry that the company could be forced into bankruptcy.
The company says it needs the shareholders cash to fund pressing operational needs and pre-empt a deepening financial crisis.
Just a year ago the company was forced into seeking shareholder support although it refuted reports at the time of a financial crisis at the company. The company does not expect to return to profit until at least 2016.
France Telecom paid USD390 million in late 2007 for its 51% stake in the company. Just before the sale, the government transferred Telkom Kenya's 60% stake in Safaricom to another holding entity before a stock market listing.
On the web: Daily Nation