Essar Telecom Kenya is seeking up to $250 million (approx. Sh20.7billion) over the next two years to invest in the mobile business. But the operator of yuMobile brand says it has been restricted from borrowing locally by the high interest rates. It is now seeking funding from cheaper places with a mention of Europe and China.
"We are in business with the aim of keeping costs down, you know what has been happening to interest rates here," said Madhur Taneja, yuMobile country manager. "I cannot be able to go around the world looking for financiers, that is why we have tasked BNP Paribas," he said .
The transaction advisors are expected to to give feedback on yuMobile's options on how to raise cash in the next three to six months.
Indian conglomerate, Essar Group owns a majority of 72 per cent shareholding but has given no indication it will pump in more money. ETKL had also tried seeking for more money from it local shareholders. Taneja said it will still pursue local funding.
YuMobile has invested about Sh40 billion since ts entry in Kenya four years ago. Taneja emphasised the company will stay put in the market despite lower than earlier anticipated revenues. One of its flagship project it plans to inject money is in the Long Term Evolution (4G) which is being done a consortium of operators and the government.