Telkom Kenya and Vodafone have agreed to list 9% of their subsidiary Safaricom’s shares in an IPO as a compromise over the fate of the stake. Vodafone had wanted to buy a 9% stake outright from 60% shareholder Telkom, but the pair could not agree on a price. The shares will now be sold through an IPO, reports Nairobi newspaper the East African, although UK-based Vodafone has placed a number of conditions on the sale. These include Vodafone retaining its pre-emptive rights on Telkom’s remaining shares, and an option to acquire up to 9% of Safaricom’s shares from the government at market prices at any point over the next ten years.
Meanwhile, the East African has discovered that Vodafone does not currently own 40% of Safaricom, as had been thought. The UK firm actually has a 35% interest, while 5% is held by a Kenyan company called Mobitelea Ventures. The remaining 60% is owned by the government via state-run telco Telkom Kenya. It is believed that Mobitelea acquired a 25% stake in Vodafone’s local holding company, Vodafone Kenya, in 2000; this was reduced to 12.5% in January 2003, giving Mobitelea an indirect stake of 5% in Safaricom. The paper reports that Mobitelea has links to associates of former president Daniel arap Moi.