The Kenyan government is expected to announce the sale of a minority stake in the national fixed-line telecommunications provider, Telkom Kenya, this week, after three rounds of bidding.
The East African Standard reports that Mount Kenya Communications is expected to win the bid with an offer of at least $307 million. Telkom Kenya is said to have an annual turnover in excess of $20 billion.
According to the paper, Kenyan president Daniel arap Moi will sanction and make public the bid this week. It says the government is under pressure to conclude the deal as the International Monetary Fund wants Telkom Kenya privatised. The Standard also believes the government is "desperate for cash to cover the expected budget deficit which is likely to be quite high".
Telkom Kenya is suspected to have liabilities running into billions of dollars, and has a backlog of 160 000 subscribers waiting for telephone services.
Eskom Enterprises, the business unit of the power company, is listed as a member of the Mount Kenya Communications consortium. Sources within the consortium say both Eskom and Transnet have been approached to take a 15% stake in the consortium.
Eskom Enterprises is actively pursuing deals with telecommunications providers in Lesotho and Nigeria. Eskom was not available to confirm its involvement in the Kenyan bid at the time of publication.
MTN South Africa says it considered taking part in the bidding, but abandoned Kenya in favour of Nigeria, where it recently won a national cellular licence.
"In view of the commitment to Nigeria, MTN felt that at this stage it did not want to take on too much. It is very possible that it will return to the Kenyan situation once it feels this is appropriate," says corporate spokesman Jacques Sellschop.
Malaysia Telecoms, one-half of the consortium which holds a minority stake in Telkom South Africa, was also involved in earlier bidding rounds for the Kenyan company, but is said to have offered only $130 million.
Eskom is no stranger to the telecommunications field, as it is expected to form part of a consortium that will bid for a licence to oppose Telkom South Africa as the local fixed-line provider. Transtel (the communications arm of Transnet), Sentech and Eskom are expected to form a parastatal consortium with the backing of government.
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