Bharti Airtel agreed to sell part of its stake in its Tanzanian unit to the government, following talks between the two parties to resolve a dispute around ownership, as it reportedly looks to acquire Telkom Kenya.
“We have in principle agreed to move forward with a new arrangement of shareholding of 51:49, where Airtel will now drop from 60 per cent to 51 per cent and the people of Tanzania through the ownership of the government of Tanzania will own 49 per cent,” Bharti Airtel chairman Sunil Mittal said in a statement viewed by Reuters.
In 2017 President John Magufuli raised the issue of ownership. He said state-run Tanzania Telecommunications Company owned the local subsidiary of Bharti Airtel, while the operator hit back, stating it had received approval to acquire a 60 per cent stake.
Now it appears in addition to giving the government more shares, Bharti Airtel will also pay dividends.
“It’s great that they have agreed to give dividends to the government, which for eight to ten years we had not received. The percentage of dividends is still under discussion,” Magufuli said.
In November 2018 the government slammed Bharti Airtel plans to IPO its Africa business as unlawful (Airtel Tanzania is one of 14 units which make up Airtel Africa), stating it should have been consulted.
At the time the company said it had already informed Tanzania’s authorities about the IPO and added there would be no change in the ownership structure of its unit in the country.
Meanwhile news of Bharti Airtel’s interest in Telkom Kenya has resurfaced.
In June 2018 it reportedly abandoned talks to merge its Kenya unit with the rival after the two disagreed on a number of issues including future investment plans.
Now it appears it is once again in talks to make a deal, sources told Reuters. London-based Helios Investment owns a 60 per cent stake in Telkom and was looking to partly cash-out, the sources added.Subscribe to our daily newsletter