We are financially stable, says Telkom Kenya

By MORRIS ARON

Michael Ghossein, the Chief Executive of Orange Telkom Kenya, was at pains to dismiss reports that the company was headed to insolvency.

Ghossein said at a press conference that the firm did not have any liquidity concerns and that it was able to meet all its short-term financial obligations, including loan servicing.

"It is true we need cash to invest. Telecommunications is a capital-intensive sector. All these would be clear once our business plan is approved in two to three weeks time," explained Ghossein. "The reports in the media portrayed the firm as broke. I have had lots of meetings with banks, suppliers, investors to re-assure them."

Ghossein said the firm is servicing loans it owes Kenya Commercial Bank and Standard Chartered normally at a cost of Sh230 million a month.

In addition, Ghossein says the firm was handling its day-to-day operations well, including its immediate expenses. Eddie Njoroge, the chairman of the board, also said the last one-year had been ‘hard’ for the firm due to cable vandalism, foreign exchange volatility, a tough regulatory environment, and a vicious price war. Njoroge said the firm’s business plan was under validation and that the board would give its announcement in "a few weeks".

The two were responding to media reports that the company was looking for a Sh10 billion-taxpayer bail-out to continue its operations.

The report—based on a leaked business plan—also stated that the firm was staring at a possible auction of its assets.