yuMobile staff block bid to sell firm’s stake

PHOTO | FILE yuMobile country manager Madhur Taneja. The firm has been seeking money to expand its footprint in Kenya.

What you need to know:

  • Firm barred from changing its workers’ contracts
  • The courtroom drama has played out over the last two weeks with the staff obtaining an interim conservatory order from the Industrial Court on January 31 barring Essar from “divesting itself of any portion of its stock” pending hearing of their petition.

Essar Telecom Kenya’s bid to raise money by selling a stake in yuMobile has hit a snag after employees moved to court to protect their interests.

The courtroom drama has played out over the last two weeks with the staff obtaining an interim conservatory order from the Industrial Court on January 31 barring Essar from “divesting itself of any portion of its stock” pending hearing of their petition.

The telecom’s top brass had by the end of last week obtained a counter directive from the Industrial Court varying the previous order.

yuMobile has also been restrained from varying any employee contracts until the court dispute is determined: “… pending the hearing and determination of the petition, the respondent be and is hereby restrained from varying the petitioners terms of employment save by consent of the parties or with leave of this court,” reads the February 7 court order in part.

Last month, Essar Telecom confirmed that it was set to conclude talks to sell a part of a Kenyan business to a strategic investor by the end of next month.

The need for cash saw Essar Telecom buy out local minority shareholders in yuMobile last year after they failed to inject hundreds of millions of shillings into the firm.

INFRASTRUCTURE NETWORK

Essar Telecom is trying to raise about Sh8.61 billion ($100 million) to widen its reach in the country by investing in its infrastructure network.

“Priority will be given to widening our footprint and upgrade our network from 2G to 3G which allows for faster data speeds, increase capacity into the existing markets among others,” Essar Telecom said in an earlier statement.

The Communications Commission of Kenya has issued yuMobile a one-year license to test-run the 3G network before it can roll out the services on a commercial basis. yuMobile, which runs services on the 2G network, is the only one of Kenya’s four telecom firms without a 3G platform.

Initially, the company planned to leapfrog 3G and move to 4G. However, government plans to roll out 4G under a consortium of firms have stalled forcing it to seek an alternative in order to remain competitive.