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Kenya’s yuMobile employees give nod to exit plan

Kenya , 09 May 2014

Kenya’s yuMobile employees give nod to exit plan

Employees of Essar Telecom’s phone company yuMobile have agreed to its planned exit from Kenya through acquisition.

The employees have also agreed on withdrawing a case on the matter before a Nairobi court.

Previously, Safaricom and Airtel have expressed interest in buying yuMobile.

But a cloud of uncertainty hangs over the acquisition plan, after Safaricom said it was still reviewing whether or not to proceed with the deal following unhappiness over strict rules from the country’s regulator. Both Safaricom and Airtel have each previously agreed to respectively acquire yuMobile’s infrastructure and subscribers at Ksh 8 billion.

Nevertheless, plans to close down the yuMobile brand in Kenya seem to be going ahead.

“We have agreed to settle the petition in terms of a separation package, which will be paid at the point of exit from the company,” said Charles Kanjama, the employees’ lawyer.

yuMobile employees had moved to court to block the telecom company’s plan to exit Kenya through an acquisition by Safaricom and Airtel Kenya, as the employees said they had not been guaranteed whether the two companies would absorb them into their operations.

As a settlement of the case, the employees are set to receive a severance pay of 60 days for every completed year of service and a bonus of one month’s salary. The employees are also planned to remain subscribed to medical cover up to August 31 this year, which is expected to give them time to seek alternative schemes.

The employees also urged yuMobile management to do everything within their power to have Safaricom and Airtel recruit them once the acquisition is finalised.

“All employees, including those who had sued the company, authorise the management to take all reasonable efforts to negotiate their possible recruitment with either Safaricom or Airtel,” Kanjama told the court.

yuMobile; however, have not made any promises on the latter request, as this decision remains firmly at Safaricom and Airtel’s discretion.

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