Kenya's Yu to Raise $100 Million by March for Network Upgrades

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India's Essar expects to raise around USD100 million for its Kenyan subsidiary Yu by selling a stake in the firm within the next few months.

The funds are expected to be used to finance the expansion of the mobile network. The firm is still left facing a funding shortfall of around US$150 million though.

"We are talking to several international firms and it is very difficult to give names at this particular stage due to confidentiality agreements signed by the," Essar Kenya chief executive Madhur Taneja told the Business Daily, adding that the $100 million deal will be concluded before March.

He did not say how much of the company would need to be offered to the investor in exchange for the USD100 million stake though.

It should be noted that the company is required to keep at least 20% of its shares owned by local shareholders, and at the moment, the company is not compliant with that regulation.

It was recently given a waiver on the 20% requirement, as it was generally accepted that local shareholders lacked the ability to inject the funding that the mobile network required.

"Considering the capital-intensive nature of the industry, it was difficult for the local shareholders to keep investing in the business at rapid pace," said Mr Taneja.

On the web: Business Daily

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Tags: essar  yu  Kenya 

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