Essar Telecom Blocked from Selling Stake in Kenyan Subsidiary
Published on: 10th Feb 2014
By: Ian Mansfield
Staff working for Essar Telecom's Kenyan subsidiary Yu have secured a court order blocking the Indian owner from selling a stake in the firm to outside investors.
Essar had recently said that it expects to raise around USD100 million for its Kenyan subsidiary by selling a stake in the firm within the next few months, and was talking to several interested parties.
However, for reasons that do not seem entirely clear, Yu employees have sought a court order blocking any sale, claiming that it would affect their rights.
The court order is an interim one, and a full hearing will be held later.
An order blocking the sale would bring the court into conflict with another law which requires Yu to have at least 20% of its shares owned by Kenyan investors. At the moment the company is solely owned by the Indian company.