The government is selling a huge chunk of a telecom giant to fund infrastructure projects. Officials plan to divest a fifteen percent stake in Safaricom to the Vodacom Group. This partial sale aims to raise over two hundred billion shillings for development financing. Proceeds are earmarked as seed capital for a national infrastructure fund and a sovereign wealth fund.
The transaction involves selling billions of shares at a set price per share, representing a significant premium. Upon completion, Vodacom's ownership would increase to fifty-five percent. The government would retain a twenty percent stake and two board seats. Safeguards include commitments to employment stability and continued support for the company's foundation.
The move shifts toward private sector participation for meeting development needs during constrained fiscal conditions. Funds would target priority sectors like energy, roads, water, and digital infrastructure. This approach intends to reduce reliance on government borrowing and additional taxation.
Legally, the deal falls under the Privatization Act and requires parliamentary consideration within a set period. It also needs approvals from several regulatory bodies, including the capital markets and competition authorities. The transaction's scale is framed as a demonstration of confidence in the local securities exchange.
The transaction involves selling billions of shares at a set price per share, representing a significant premium. Upon completion, Vodacom's ownership would increase to fifty-five percent. The government would retain a twenty percent stake and two board seats. Safeguards include commitments to employment stability and continued support for the company's foundation.
The move shifts toward private sector participation for meeting development needs during constrained fiscal conditions. Funds would target priority sectors like energy, roads, water, and digital infrastructure. This approach intends to reduce reliance on government borrowing and additional taxation.
Legally, the deal falls under the Privatization Act and requires parliamentary consideration within a set period. It also needs approvals from several regulatory bodies, including the capital markets and competition authorities. The transaction's scale is framed as a demonstration of confidence in the local securities exchange.
