Preparations for Kenyan mobile telecommunications company Safaricom's initial public offering (IPO) will begin within months, says CEO Michael Joseph.
"The IPO will commence within the next 12 to 18 months," confirms Joseph.
The Kenyan government and UK-based telecommunications operator Vodafone, shareholders in Safaricom, have long been in negotiations over the price of the IPO shares.
Telkom Kenya's restructuring programme necessitated the IPO, says Joseph. "Telkom Kenya is streamlining its operation by retrenching 6 500 workers. This restructuring programme has made it necessary for the government-owned telecoms operator to raise $89 million."
The government chose to raise the cash through the sale of around 25% of its 60% shares in Safaricom, says Joseph. The value of government's 25% stake in Telkom Kenya has been estimated at around $428 million.
The government will sell its Safaricom shares through the Nairobi Stock Exchange, which will allow subscribers and other Kenyans to become Safaricom shareholders, Joseph adds.
Safaricom declared a pre-tax profit of $154 million for the year ended March 2006, making it the most profitable company in East Africa. The company has over five million subscribers.
The company's IPO will be the biggest in Kenya's history, Joseph says.
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