Safaricom Plc shareholding in its Ethiopian subsidiary fell slightly to 54.09 percent in the six months to September after a Sh25 billion ($193 million) new funding round for the business.
The telecoms shareholding in the unit registered a slight fall from 54.17 percent in March this year, even as its cumulative funding in Safaricom Telecommunications Ethiopia (STE) rose 3.4 percent to Sh164.3 billion ($1.265 billion) from Sh158.8 billion ($1.223 billion).
Total funding for the business, including both equity and debt, rose faster by 7.2 percent to Sh369.2 billion ($2.842 billion) from Sh344.1 billion ($2.649 billion) in March as Safaricom’s partners, including Sumitomo Corporation, also chipped in.
The slight decline in Safaricom’s shareholding in the Ethiopian subsidiary signals that the telecoms operator made a smaller equity investment in the business during the period than its co-investors –Vodacom, Sumitomo Corporation, British International Investment (BII) and International Finance Corporation (IFC).
Debt funding for the Ethiopian unit rose faster than equity in the period as the business nears the break-even point.
Safaricom’s parent Vodacom also saw its shareholding in the business fall slightly from 6.02 percent at the end of March to 6.01 percent in September.
Sumitomo’s and BBI’s shareholding in STE rose from 23.5 percent to 23.56 percent and from 9.5 percent to 9.52 percent respectively.
IFC’s stake in the business also rose slightly from 6.81 percent from 6.82 percent in the same period.
Debt funding for the Ethiopia business rose by Sh14.2 billion ($110 million) in the period including Sh4.8 billion ($37 million) in local currency (Birr) funding and Sh9.4 billion ($73 million) in foreign currency lending from IFC, Standard Bank and Absa Group.
Equity funding for the business rose to Sh10.7 billion ($83 million) in the six-month period, reaching Sh307.6 billion ($2.368 billion) from Sh296.8 billion ($2.285 billion) in March.
Safaricom’s shareholding in the Ethiopia business has until now been incremental, having grown from 51.67 percent in March 2025 to 54.17 percent in March this year.
The telecoms operator shareholding in the business is likely to remain subdued as its co-investors hold a right to buy an additional stake in the unit having let Safaricom take up a greater part of the subsidiary through previous fund-raising rounds.
Safaricom previously disclosed that its co-investors retain a right to buy back a 2.78 percent stake lost in the financial year to March 2026.
The Ethiopian subsidiary is also expected to be mostly funded from debt going forward as it nears profitability.
New debt funding for the six months period to September 2026 went to settle obligations to vendors, which were previously deferred, along with funding ongoing operations.
“Part of the funding was applied to settle outstanding vendor obligation while the business also secured $40 (Sh5.1 billion) equivalent local currency debt and $60 million (Sh7.7 billion) foreign currency debt to fund ongoing business operations,” said Safaricom Plc chief finance and innovation officer Dilip Pal.
“Overall, the business remains well funded with an increasing focus on leveraging the Ethiopia balance sheet through debt funding as the business continues scaling.”
Safaricom Ethiopia losses narrowed significantly by 96.5 percent to Sh434.4 million in six months to September, leaving the subsidiary on the brink of breaking even by March 2027.
The unit is betting on increased customer subscriptions and usage to drive the business across the profit line.
“The growth we have seen is based on three key drivers of growth. We have more users, more usage, and a higher rate. If you unpack it, all three drivers have been growth levers,” Wim Vanhelleputte, the chief executive officer of Safaricom Telecommunications Ethiopia said on Thursday last week.
