# Vodacom Keeps Safaricom for Now. A Court Ruling Still Threatens Its Control

> MKNIRALO — Business — Business · Africa

- Published: 2026-11-11
- Estimated reading time: 6 minutes
- Byline: Alex — Business Enthusiast
- Byline disclosure: Alex is a house editorial byline maintained by MKNIRALO, not a claim of an independently verified individual. It does not imply personal product testing or professional credentials.
- Author profile: https://mkniralo.com/authors/alex/
- Tags: Vodacom, Safaricom, Kenya, South Africa, Court Appeal, Telecoms
- Cover image: https://mkniralo.com/images/vodacom-safaricom-stake-sale-court-appeal-loan-defaults-2026.svg

Vodacom retains control of Safaricom pending an appeal, but the court judgment has already triggered loan defaults and temporary waivers.

Vodacom has kept its controlling stake in Kenya's Safaricom while it appeals a court decision overturning the sale of government shares. But its November 10 interim results reveal a separate consequence: the September judgment triggered default clauses in some borrowing arrangements. Lenders have since granted waivers related to the ruling, leaving the company with a temporary financial remedy rather than a settlement of the ownership dispute.

## A legal challenge reaches the lenders

The case began as a challenge to the Kenyan government's sale of a 15% stake in Safaricom, but it now has consequences for Vodacom's financing. A three-judge High Court bench declared the transaction unconstitutional and void on September 15. According to Vodacom's interim-results disclosures as reported by TechCentral, that judgment gave rise to events of default and cross-default under specified group funding arrangements. Those clauses matter because lenders can gain contractual rights following an event they regard as a default even when the company's mobile networks, customers and ordinary revenue collection continue functioning. The court ruling did not by itself mean that all Vodacom borrowing became immediately repayable.

Some financiers provided written assurances that they would not demand repayment or accelerate loans as a result of the judgment. Yet assurances did not always satisfy the accounting test for treating debt as long-term: if the company lacked an unconditional right to defer payment for at least twelve months, classification could change. Vodacom consequently moved R2.3 billion of borrowings from non-current to current liabilities at September 30, according to the reporting on its results. A later waiver can limit a creditor's ability to act on a specific default. It does not make the underlying court judgment disappear or settle who should ultimately own the disputed shares.

Sources:
- [Safaricom ruling tripped default clauses in Vodacom’s loans](https://techcentral.co.za/vodacom-safaricom-ruling-loan-defaults-waivers/288212/) — TechCentral
- [Vodacom Group interim results and cash dividend distribution for the six months ended 30 September 2026](https://www.moneyweb.co.za/mny_sens/vodacom-group-limited-vodacom-group-interim-results-and-cash-dividend-distribution-for-the-six-months-ended-30-september-2026/) — Moneyweb

## What the waiver does—and does not—fix

Vodacom said it subsequently obtained waivers from the relevant lenders for defaults arising solely from the Kenyan judgment. That wording is important: the relief is tied to a particular cause, not a blanket guarantee that every loan covenant will remain satisfied under all future circumstances. The company also reached a standstill arrangement on a Stanbic Bank Kenya facility associated with rights to future Safaricom dividends. Under the reported arrangement, funds in a dedicated account could not simply be withdrawn; around R1.2 billion in received dividends was restricted at the period end.

These effects show how a legal dispute can affect financial flexibility without requiring a change in the mobile operator's day-to-day management. The revised balance-sheet classification says something about enforceable repayment rights at a reporting date, not necessarily a sudden outflow of cash. Investors therefore need to separate at least three questions: whether lenders can invoke a clause, whether the accounts must present a borrowing as current, and whether a court will ultimately sustain the contested acquisition. The first two can be managed through agreements and disclosures while the third remains before the judiciary.

Sources:
- [Safaricom ruling tripped default clauses in Vodacom’s loans](https://techcentral.co.za/vodacom-safaricom-ruling-loan-defaults-waivers/288212/) — TechCentral

## The stake still stands during the appeal

Vodacom completed the acquisition on June 30, raising its effective interest in Safaricom to 55%. The transaction included a 15% block from the Kenyan government and another 5% interest sourced through Vodafone arrangements. In an October 16 stock-exchange update, Vodacom said the Court of Appeal in Nairobi had considered its stay request on October 13 but chose to expedite the substantive appeal instead of deciding the stay application separately. The prevailing status quo concerning both the shares and the purchase consideration was to remain in place while the appeal proceeded.

Vodafone Kenya therefore remained the registered holder of the shares bought from the government, according to that company notice. This is neither a final victory for Vodacom nor an executed reversal of the sale. The High Court's judgment remains legally significant, while the appellate process determines what happens next. Reports say management expected a hearing date to be set before the end of December, but an expectation is not a confirmed listing: no specific hearing date is asserted here. If the judgment is ultimately upheld and the acquisition unwound, Vodacom's effective stake could decline from 55% to approximately 40%, potentially ending its controlling position.

Sources:
- [Safaricom ruling tripped default clauses in Vodacom’s loans](https://techcentral.co.za/vodacom-safaricom-ruling-loan-defaults-waivers/288212/) — TechCentral
- [Update on the acquisition of a controlling interest in Safaricom PLC](https://www.moneyweb.co.za/mny_sens/vodacom-group-limited-update-on-the-acquisition-of-a-controlling-interest-in-safaricom-plc-2/) — Moneyweb

## Why the High Court intervened

The September 15 decision was not a determination that Safaricom had ceased operating, or that its shares had already moved back into state ownership. The High Court's judgment describes a constitutional challenge to the proposed partial divestiture, including concerns over the public process and how the transaction was supported. Court reporting also identifies scrutiny of disclosure, valuation grounds and the consequences for the government's ownership and representation. These issues are more specific than a general claim that foreign investment is unlawful.

The distinction matters to investors and the public alike. The government's decision involved a significant national asset and a transfer that would leave it with a smaller stake. Judicial review examined whether the process met legal obligations; the pending appeal creates the opportunity for higher-court scrutiny of that reasoning. Until that process produces a binding outcome and appropriate implementation follows, reports about shares being 'returned' should be understood as descriptions of what the High Court ordered, not proof that a transfer of registered ownership has taken place.

Sources:
- [Gachoka & 3 others v Planning & 11 others [2026] KEHC 13493 (KLR)](https://sheriahub.com/cases/ke/caselaw/gachoka-3-others-v-planning-11-others-2026-kehc-13493-klr.pdf) — SheriaHub
- [Kenya to fast-track R31.28bn Safaricom-Vodacom deal appeal](https://www.moneyweb.co.za/news/companies-and-deals/kenya-to-fast-track-r31-28bn-safaricom-vodacom-deal-appeal/) — Moneyweb / Bloomberg

## The purchase price and the larger debt picture

The government's 15% block was sold for approximately KSh204.3 billion, with a separate amount of about KSh40.2 billion associated with future dividends, according to contemporaneous transaction reporting. Those are Kenyan-shilling consideration amounts, not Vodacom's net-debt figure. TechCentral reported that the wider acquisition was funded with R35 billion of debt, including R9 billion in preference-share financing, while the consolidation brought Safaricom's own net debt into the group. Its report placed Vodacom's net debt at R135.6 billion at the interim reporting date, up R78.8 billion from a year earlier.

The rand denomination is crucial: R135.6 billion is not US$135.6 billion and should not be presented as an independently measured dollar debt total. Vodacom's net debt-to-EBITDA ratio increased to 1.6 times from 0.9 times; using a pro-forma approach that annualises Safaricom earnings, the reported multiple was 1.3 times. These measures describe the larger consolidated group after the acquisition, rather than the isolated cost of the court dispute. Debt growth and covenant waivers are connected to the deal but are analytically different developments.

Sources:
- [Safaricom ruling tripped default clauses in Vodacom’s loans](https://techcentral.co.za/vodacom-safaricom-ruling-loan-defaults-waivers/288212/) — TechCentral
- [Kenya to fast-track R31.28bn Safaricom-Vodacom deal appeal](https://www.moneyweb.co.za/news/companies-and-deals/kenya-to-fast-track-r31-28bn-safaricom-vodacom-deal-appeal/) — Moneyweb / Bloomberg

## Stronger earnings do not settle ownership

The November 10 results also reported a 25.7% rise in headline earnings per share to 587 South African cents. Revenue increased 25.6% to R102.5 billion, with consolidation of Safaricom contributing to the change. The company treated Safaricom as a subsidiary from June 30 and reported a sizeable one-off accounting gain from remeasuring its earlier holding. Comparisons with the previous year therefore need care: adding a controlled business can make reported group growth look different from growth on a like-for-like basis.

That is the tension at the centre of the story. A strategically important acquisition can deliver scale and higher reported earnings while a successful legal challenge threatens the basis for consolidation and exposes contractual vulnerabilities. For now, appellate arrangements preserve Vodafone Kenya's registered shares, and lender waivers address defaults caused by the judgment. Neither development resolves the constitutional case. The next decisive evidence will be what the appeal court actually orders and how Vodacom subsequently reports its financing and control—not the mere passage of time or the strength of one set of interim figures.

Sources:
- [Safaricom ruling tripped default clauses in Vodacom’s loans](https://techcentral.co.za/vodacom-safaricom-ruling-loan-defaults-waivers/288212/) — TechCentral
- [Vodacom Group interim results and cash dividend distribution for the six months ended 30 September 2026](https://www.moneyweb.co.za/mny_sens/vodacom-group-limited-vodacom-group-interim-results-and-cash-dividend-distribution-for-the-six-months-ended-30-september-2026/) — Moneyweb
- [Update on the acquisition of a controlling interest in Safaricom PLC](https://www.moneyweb.co.za/mny_sens/vodacom-group-limited-update-on-the-acquisition-of-a-controlling-interest-in-safaricom-plc-2/) — Moneyweb

## About this article

This article reflects the public sources available on the publication and update dates shown above. For developing stories, follow the linked source pages for subsequent statements or decisions.

## Sources and further reading

- [Safaricom ruling tripped default clauses in Vodacom’s loans](https://techcentral.co.za/vodacom-safaricom-ruling-loan-defaults-waivers/288212/) — TechCentral (published 2026-11-10) (accessed 2026-11-10)
- [Vodacom Group interim results and cash dividend distribution for the six months ended 30 September 2026](https://www.moneyweb.co.za/mny_sens/vodacom-group-limited-vodacom-group-interim-results-and-cash-dividend-distribution-for-the-six-months-ended-30-september-2026/) — Moneyweb (published 2026-11-10) (accessed 2026-11-11)
- [Update on the acquisition of a controlling interest in Safaricom PLC](https://www.moneyweb.co.za/mny_sens/vodacom-group-limited-update-on-the-acquisition-of-a-controlling-interest-in-safaricom-plc-2/) — Moneyweb (published 2026-10-16) (accessed 2026-11-11)
- [Gachoka & 3 others v Planning & 11 others [2026] KEHC 13493 (KLR)](https://sheriahub.com/cases/ke/caselaw/gachoka-3-others-v-planning-11-others-2026-kehc-13493-klr.pdf) — SheriaHub (published 2026-09-15) (accessed 2026-11-11)
- [Kenya to fast-track R31.28bn Safaricom-Vodacom deal appeal](https://www.moneyweb.co.za/news/companies-and-deals/kenya-to-fast-track-r31-28bn-safaricom-vodacom-deal-appeal/) — Moneyweb / Bloomberg (published 2026-10-16) (accessed 2026-11-10)