Essar Capital, the fund manager of Essar Global Fund Ltd (EGFL), which through its portfolio company Essar Telecom Kenya Limited, operates the yuMobile telecom service in Kenya, today announced the signing of binding agreements with Safaricom and Airtel for sale of its telecom business in Kenya for approximately USD 120 million.
The divestment will see Safaricom take over Essar Telecom's network, IT and office infrastructure while Airtel will acquire the companys subscribers.
Essar Capital said the transaction has received approval from the Communication Authority (CA) in Kenya and it will now be filed with the Competition Authority of Kenya (CAK) for approval. The company expects the transaction to conclude during the fourth quarter of 2014.
"We have structured the transaction such that our customers will not need to change their mobile numbers or sim cards, post this transaction," yuMobile's Chief Executive Officer Madhur Taneja said.
Taneja added that close to 90 per cent of the yuMobile's employees will be absorbed by Safaricom and Airtel.
The divestment of Essar Telecom represents Essar Global Fund's second significant portfolio exit in the last few months, following the sale in July of its US-based outsourcing company, Aegis US, to Teleperformance for USD 610 million.
In March 2011, Essar exited from telecom business in India by selling its 33 per cent stake to Vodafone in Vodafone Essar, now Vodafone India, for USD 5.2 billion.