Vodacom Group will retain its 55 percent stake in Safaricom, Kenya’s largest telecom operator, pending a fast-tracked appeal, after the Court of Appeal ordered on October 13 that the existing position on the shares and the purchase consideration be maintained until the appeal is heard. The case returns before the court’s registrar on October 23 for directions. Vodacom told investors on Friday that its subsidiary Vodafone Kenya remains the registered holder of the shares acquired from the government on June 30, with the consideration preserved pending the outcome.
The underlying transaction took Vodacom from about 35 percent to 55 percent of Safaricom, through a 15 percent stake bought from the Kenyan government at 34 shillings a share and an effective five percent stake held by its parent Vodafone. The government received 204.3 billion shillings for its shares, alongside 40.2 billion shillings paid in advance against future dividends.
On September 15 the High Court declared the government’s sale unconstitutional, null and void, ruling that public consultation had been inadequate, and ordered the shares restored to the state. Both the National Treasury and Vodacom are appealing, and the Attorney-General has been directed to file the substantive appeal for a priority hearing.
If the High Court judgment ultimately stands, Vodacom’s stake falls to about 40 percent and it loses majority control; the separate five percent acquired from Vodafone is unaffected by the ruling. The appeal is now the reference point for every contested Kenyan state asset sale, because the consultation standard it sets will govern how far a government can sell strategic holdings without a public process.