Telecommunications giant Vodacom Group has confirmed it will maintain control over an additional 15% equity block in Safaricom for now, following an interim directive from Kenya’s Court of Appeal to safeguard the existing arrangement while an expedited challenge is reviewed.
In a regulatory disclosure filed on the Johannesburg Stock Exchange, the company stated that its local entity, Vodafone Kenya, will continue as the registered owner of the shares acquired from the Kenyan government on June 30. The appellate court also mandated that the capital remitted to the state must remain protected until the final verdict is reached.
Rather than making an immediate substantive ruling, the appellate bench chose to advance the substantive hearing on an accelerated timetable while freezing the status quo regarding both the shareholding and the paid consideration. Vodacom underscored its unwavering belief in the commercial rationale for the deal and pledged to provide timely updates to stakeholders.
The current legal maneuvering follows a significant hurdle in September, when a High Court bench comprising Justices Francis Gikonyo, Roselyne Aburili, and Tabitha Ouya invalidated the $1.9 billion transaction. That earlier decision declared the stake transfer illegal and unconstitutional, finding that the divestiture violated statutory public finance rules and failed to incorporate necessary citizen engagement.
The partial privatization served as a cornerstone for President William Ruto’s economic strategy. Facing high debt levels and constrained fiscal room for tax increases, the administration sought to monetize portions of premier state-linked enterprises—such as Safaricom and the Kenya Pipeline Company—to finance a $39 billion infrastructure drive focused on upgrading transportation corridors, energy facilities, and water projects.
Under the contested transaction, Vodacom’s footprint in Safaricom expanded from 40% to a decisive 55% majority, trimming the state’s stake down to 20%. As part of the wider structural reorganization, Vodacom also absorbed Vodafone International Holdings’ residual 12.5% interest in Vodafone Kenya to gain full ownership of the intermediate holding firm.
The execution of the deal generated approximately 204.3 billion shillings ($1.6 billion) directly, alongside an extra 40.2 billion shillings ($300 million) unlocked through the securitization of projected dividend streams. If the appellate judiciary ultimately upholds the cancellation of the sale, the Kenyan treasury will face the obligation of reimbursing the complete $1.9 billion payout.
