Telecom Lead Africa: The Essar group is planning to sell
its controlling stake in Essar Telecom Kenya (Yu Mobile).
The group has appointed BNP Paribas to find a buyer.
The sale of stake in Yu Mobile will complete the exit of
the Essar group from telecom operations in India and overseas.
With the appointment of BNP Paribas, the group seeks the
best value from the sale of its controlling stake of around 72 percent in Yu
Mobile. The company expects that the valuation for the same to be several
hundred million dollars.
The Indian steel, energy and communications group had
also parted ways with Vodafone India by selling its JV stake for $5.46 billion.
Last year, the group also exited its stakes in Warid
Telecom’s Ugandan and Congo operations scaling back its plans to expand across
Africa.
Additionally, the group had scaled down its holdings in
India-headquartered Loop Telecom to around two per cent. The group had sold its
stake in its telecom tower arm Essar Telecom Infrastructure to an arm of
American Tower Company.
Essar group has invested upwards of $500 million in growing
its business in Kenya.
The decision to sell stake in Essar Telecom Kenya follows
the company’s decision to sell shareholding in Vodafone India which was the
main chunk of its telecom business.
The company had 25.54 lakh subscribers in March 2012.
Essar Telecom Kenya posted growth of 14.5 percent, representing growth of 3.24
lakh new subscriptions.
Kenya has shown relatively low price elasticity of demand
unlike India where usage zoomed in response to price cuts, which makes it
tougher market for Indian companies to operate.
