Essar exits telecom business, nets $6 bn

essar-house-yumobileEssar Global Fund Limited (EGFL), a global investment fund controlling a number of world-class assets has completely exited the telecom business for an aggregated value of over $6 billion.

Recently, Essar Global has exited telecom business with the successful closure of transaction in Essar Telecommunications Kenya Limited (yuMobile) for a total deal value of approximately $120 million.

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 taken over the 2.55 million subscriber base of yuMobile. The total deal value of the transactions is approximately $120 million.

The transaction has concluded with successful migration of subscribers to Airtel, post receiving all the regulatory approvals. As part of the transaction, close to 90 percent of yuMobile’s employees have been absorbed by Safaricom and Airtel.

Essar’s Monetization of Telecom Business
In 2010, Essar sold the telecom tower business to ATC for $425 mn
In 2011, Essar sold 33 percent stake in Vodafone Essar for $5.2 bn
In July 2014, the US-based outsourcing company, Aegis US, was sold to Teleperformance for $610 mn
In January 2015, Essar sold EKTL operations for $120 mn

yuMobile’s chief executive officer, Madhur Taneja said, “We are delighted to have completed this complex transaction and we are thankful to the Kenyan government and the various regulators for their support in facilitating the transaction. We would like to thank our employees for their hard work and wish them every success in the future. We would also like to thank the yuMobile customers for their patronage.”

Commenting on the completion of transaction, Firdhose Coovadia, board member, Essar Capital, fund managers, EGFL said, “Completion of the ETKL transaction realizes Essar Capital’s strategy of divesting EGFL’s investments in the global telecom sector. This was a very challenging transaction and we are of the opinion that the resulting consolidation in the Kenyan mobile telecom market will better serve the long term interests of all customers.”

“We would like to acknowledge the contribution of the yuMobile management team and employees in facilitating the sale of the business. The divestment will serve to increase the focus of EGFL on maximizing the value of its energy, metals and mining, and infrastructure sector portfolio investments and continue to divest from its non-core portfolio investments,” commented Coovadia.

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