Essar Exits Telecom Business After Monetizing $6 Billion
By selling off yuMobile in Kenya to Bharti Airtel and local operator Safaricom, Essar on Thursday marked its exit from its telecom business globally and completed monetization in the segment for $6 billion.
Press Trust of India | Last Updated: January 15, 2015 22:53 (IST)
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New Delhi: By selling off yuMobile in Kenya to Bharti Airtel and local operator Safaricom, Essar on Thursday marked its exit from its telecom business globally and completed monetization in the segment for $6 billion.
Essar Global Fund Limited (EGFL), managed by Essar Capital, said in a statement that "it has completely exited the telecom business with successful closure of the transaction in Kenya".
Essar has concluded sale of its Kenya based yuMobile to Airtel and Safaricom for $120 million.
The deal is part of EGFL's strategy to monetize global telecommunications portfolio at a value of over $6 billion, the statement said.
"With this EGFL has completed monetising its telecom business for an aggregate value of over $6 billion," the statement said.
Telecom Kenya Limited (ETKL), which operates the popular yuMobile telecom service in Kenya has sold its network, IT, and office infrastructure to Safaricom, while Airtel has absorbed over the 2.55 million subscriber base.
Airtel said that it has successfully integrated yuMobile customers into its network.
"Airtel now consolidates its position as the second largest mobile operator in Kenya with a combined customer base of over 8 million and a 26.6 per cent customer market share," Airtel said.
yuMobile customers will also retain their existing mobile numbers and continue to enjoy their services.
"Completion of the ETKL transaction realises Essar Capital's strategy of divesting EGFL's investments in the global telecommunications sector," said Firdhose Coovadia, board member of Essar Capital, fund managers of EGFL.
In 2010, Essar sold the telecom tower business to ATC for $425 million. In 2011, it sold its entire stake (33 per cent) in Vodafone Essar for $5.2 billion.
In July 2014, the US based outsourcing company, Aegis US, was sold to Teleperformance for $610 million.
With the sale of the telecom business in Kenya, Essar has exited the telecom space thereby monetizing all its investments.
Story first published on: January 15, 2015 22:46 (IST)