The Competition Authority of Kenya (CAK) has approved the decision of three foreign firms to convert Internet and pay TV provider Wananchi Group loans into shares.
The companies include Triple HoldCo Limited (THL), Liberty Global Europe 2 Limited (Liberty) and Altice Africa S.A.R.L (Altice), the competition watchdog said in a statement Tuesday.
It was not immediately clear the value of the transaction but in 2011 Liberty was part of an international consortium of investors that helped the firm raise Sh5 billion for regional expansion.
“The transaction involves the three acquirers converting their debt in the target into equity, with certain controlling rights. The transaction, therefore, met the threshold for mandatory notification and full merger analysis as provided in the Competition (General) Rules, 2019,” CAK said.
Triple HoldCo Limited is a Mauritian company and does not own stake in any Kenyan entity but its parent company Intercontinental Trust Limited controls various undertakings in Kenya.
“Liberty Global Europe 2 Limited (Liberty), the 2nd acquiring undertaking is wholly owned by Liberty Global Plc, a publicly-traded holding company on the NASDAQ in the United States of America. It does not control any undertaking in Kenya,” the regulator said.
Altice is based in Luxembourg and is involved in the acquisition, management, development, and transfer of securities. The tech firm already owns 17.13 stake in the company.
The Internet provider has an intricate ownership structure that has been a subject of boardroom wars and court cases. The structure is made up of several layers of companies.
The biggest shareholder is ATMTF1 with 69 percent. East Africa Capital Partners Management, associated with co-founder Richard Bell, Wananchi Nominees Limited, ISP Kenya Limited and East Coast Telecoms Limited own ATMTF1.
Other shareholders include ECP with 4.56 percent stake, Vollin (3.65 percent) and ATMT Fund II (2.72 percent). LGI Ventures and ATMT Fund III own 1.82 percent and 0.13 percent respectively.
Wananchi Group started off as Wananchi Online in 2000 with ICT secretary Joe Mucheru and former CEO Njeri Rionge among its founders.
In 2008, the business transformed into Wananchi Group after new investors joined the company following several rounds of fundraising through a mix of debt and equity from State-owned Export Development Canada, Emerging Capital Partners, Altice, Nasdaq-listed cable firm Liberty Global Inc, and New York-based Prudence Holdings, among others.
This resulted in Wananchi Group adopting a complex ownership structure made up of several classes of shares (A, B, C, D and E); multiple special purpose vehicles; and a hybrid of financing structure designated as mezzanine, senior and, junior debt.
Wananchi has operations in a dozen African countries — including Kenya, Uganda, Tanzania, Rwanda, South Sudan, Burundi, Ethiopia, Somalia, Zambia, Malawi, and Mauritius.
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