Essar Global Fund Limited (EGFL) has exited the telecom business, monetizing the telecom business for USD 6 billion after a successful closure of the transaction in Kenya.
Essar Telecom Kenya Limited (ETKL), which operates the popular yuMobile telecom service in Kenya, has sold its network, IT and office infrastructure to Safaricom, while Airtel has taken over the 2.55 million subscriber base of yuMobile. The total deal value of the transactions is approximately USD 120 million.
The transaction has concluded with successful migration of subscribers to Airtel, post receiving all the regulatory approvals. As part of the transaction, close to 90% of yuMobile’s employees have been absorbed by Safaricom and Airtel.
yuMobile’s Chief Executive Officer Madhur Taneja said: “We are delighted to have completed this complex transaction and we are thankful to the Kenyan Government and the various regulators for their support in facilitating the transaction. We would like to thank our employees for their hard work and wish them every success in the future. We would also like to thank the yuMobile customers for their patronage.”
Commenting on the completion of transaction, Mr Firdhose Coovadia, Board Member of Essar Capital, fund managers of EGFL said: “Completion of the ETKL transaction realizes Essar Capital’s strategy of divesting EGFL’s investments in the global telecommunications sector. This was a very challenging transaction and we are of the opinion that the resulting consolidation in the Kenyan mobile telecommunications market will better serve the long term interests of all customers. We would like to acknowledge the contribution of the yuMobile management team and employees in facilitating the sale of the business. The divestment will serve to increase the focus of EGFL on maximizing the value of its energy, metals and mining, and infrastructure sector portfolio investments and continue to divest from its non-core portfolio investments.”
With this, Essar has completed the monetization of the Telecom business.
— In 2010, Essar sold the telecom tower business to ATC for USD 425 million.
— In 2011, Essar sold its entire stake (33%) in Vodafone Essar for USD 5.2 billion.
— In July 2014, the US-based outsourcing company, Aegis US, was sold to Teleperformance for USD 610 million.
