Essar Buys Out Minority Shareholders in Kenyan Subsidiary
Published on: 5th Dec 2013
By: Ian Mansfield
India's Essar Telecommunication has bought out the minority shareholders in its Kenyan subsidiary giving it full ownership of the firm. It will however have to sell or float a stake later to bring it back within local regulations limiting foreign shareholdings to 80 percent.
Essar said that it has bought out local businessmen Mr Peter Kibiriti and Mr Jos Konzolo due to their inability to inject hundreds of millions of shillings in shareholders' loans to fund Yu's expansion plans.
The company currently has a waiver on the 80:20 shareholder rules that expires in three years time, along with a similar waiver for rival Airtel.
"Considering the capital-intensive nature of the industry, it was difficult for the local shareholders to keep investing in the business at a rapid pace. We are now in process of getting the share transfer done and filing the shareholding change," Mr Madhur Taneja, the Essar Kenya CEO said in an interview with the Business Daily yesterday.
Earlier this year, the company had been looking for fresh investors who could support the network plans, but appears to have opted to buy out the shareholders instead.
On the web: Business Daily