The Kenyan government has approved a restructuring plan to bolster the operations of stricken fixed line operator Telkom Kenya, Standard Digital reports. The new proposals include the recapitalisation of the firm via a KES10 billion (USD115.6 million) cash injection from co-owners France Telecom-Orange (FT-Orange) and the government of Kenya. Other plans include the writing-off of around KES30 billion worth of shareholder loans by FT-Orange and a retrenchment of the company’s ‘bloated workforce’. Other recommendations include improving the company’s technological platform, a harmonisation of ICT functions, and a review of top management positions.
The execution of the restructuring plan, which was approved by the cabinet on Thursday, will take effect immediately, finance minister Njeru Githae told reporters. Speaking on the sidelines of the Insurance Institute of Kenya’s (IIK’s) annual forum in Nairobi, Githae commented: ‘We have no time to lose.The implementation is immediate. We have been disappointed by the results of Telkom over this period. We have agreed with the shareholders that the company needs to be assisted to play its role in the telecommunications market. We have basically agreed on the way forward by agreeing on a number of issues. The good thing is we have agreed on a new business plan and told Telkom Kenya to identify and concentrate on areas where they are making money and that is fixed lines’. To date the government has stumped up KES2.5 billion, while FT-Orange has already written off around half (KES15 billion) of its total shareholder loans to Telkom.