Essar exits telecoms with yuMobile sale to Safaricom, Airtel

India-based investment group Essar has completed the sale of its Kenyan mobile operator yuMobile, officially known as Telekom Kenya Limited (ETKL), marking the firm’s exit from the telecoms business. Fellow Kenyan operator Safaricom acquired yuMobile’s network, IT and office infrastructure assets, while Airtel has taken over its 2.55 million subscribers.

Essar said the deal, which totalled $120 million, is part of its overall strategy to monetize its global telecoms portfolio at a accumulated value of over $6 billion.

“Completion of the ETKL transaction realizes Essar Capital’s strategy of divesting EGFL’s [Essar Global Fund Limited] investments in the global telecommunications sector,” Essar Capital Board Member, Firdhose Coovadia said.

“This was a very challenging transaction and we are of the opinion that the resulting consolidation in the Kenyan mobile telecommunications 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.”

As part of the telecoms monetizing programme, Essar last year divested its US-based outsourcing company Aegis US to Teleperformance for $610 million. Previously the company also sold its 33% Vodafone Essar stake (2011), and its telecom tower business (2010).

“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,” yuMobile’s CEO Madhur Taneja said.

“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.”