Essar raises stake in Yu Kenya to 100 per cent

Essar Telecommunication has bought out the minority shareholders in its Kenyan subsidiary, giving it full ownership of the firm. It will however have to sell or float a stake later to bring it back within local regulations limiting foreign shareholdings to 80 per cent.

Essar said that it had bought out local businessmen Peter Kibiriti and Jos Konzolo due to their inability to inject hundreds of millions of shillings in shareholder loans to fund Yu’s expansion plans.

The company currently has a waiver on the 80:20 shareholder rules that expires in three years’ time, along with a similar waiver for rival Airtel.

"Considering the capital-intensive nature of the industry, it was difficult for the local shareholders to keep investing in the business at a rapid pace. We are now in the process of having the share transfer done and filing the shareholding change," Madhur Taneja, Essar Kenya CEO said.

Earlier this year, the operator had been looking for fresh investors who could support its network plans, but appears to have opted to buy out the shareholders instead.