The plans of Orange to sell the 70% stake it has in Telkom Kenya to Helios Investment Partners has suffered a major setback following the decision of Safaricom to file a certificate of urgency before the High Court to block the sale.
According to Safaricom, if the sale that was announced in November is allowed to go through, it may not be able to recover Kshs 639.8 million it is owed by Telkom Kenya if the sale goes ahead. The charges are for unpaid interconnection fees, and liabilities it inherited from a tower sharing deal with Essar Telkom Kenya, which is now non-operational.
The two telecoms had entered into an interconnection agreement which was to see them exchange local traffic between their networks. This deal was to cost Kshs 428,905,487.45. Safaricom is asking the court to temporarily block the sale and have Telkom pay the debt, or provide a bank guarantee that the debt can be paid.
Safaricom reportedly told Justice Farah Amin that Safaricom is entitled to Kshs 99,620,277.98 accrued in the deal, as it acquired Essar’s rights after acquiring its assets. In this case Safaricom is represented by lawyer Stephen Kiptinness who said there was another similar transaction between his client and Telkom, which demanded that Safaricom be paid a further Kshs 109,936,105.08. For carrier services, the lawyer told the court that Telkom owed another Kshs 121,602,277.98.
“The respondent’s parent company, Orange Group, having announced the finalisation of negotiations and the signing of a binding agreement for sale of the respondent’s shares held by France Telkom, will at any time finalise the sale. Unless temporally orders are issued to the applicant, it will suffer irreparable financial losses and damages,” he said.
Safaricom wants the court to temporarily block the sale and have Telkom deposit the monies it says it is owed into a bank account. As an alternative, the lawyer asked the court to order Telkom to deposit a guarantee from a reputable bank to secure the debt.
“Pending the hearing of the applicant’s case, the court should issue a temporally injunction against the respondent’s employees, servants or agents, restraining them from removing, transferring, disposing or interfering with its assets, land, shares and monies held in its accounts,” Kiptinness said.
