Telecom operator Orange Kenya has asked the government for a KES 10 billion ($120 million) bailout, news reports revealed on Wednesday. The move comes as the company continues to incur massive debts following its 2007 buyout by France Telecom.

Orange made a record loss of KES 18.2 billion in 2011 and needs to raise KES 5.8 billion in order to repay bank loans by the end of the month.

According to documents published online, Orange Kenya’s management said it has hit a “brick wall”. They warn the Kenyan Treasury and France Telecom, that if the emergency cash injection failed to arrive, the operator would be unable to meet its immediate commitments (about KES 1.6 billion) to Standard Chartered Bank.

According to analysts this, “will trigger a chain reaction that could see bank loans worth KES 12.5 billion from Standard Chartered and KCB called in”.

The company added that they would only be able to cover basics like electricity, water, security and salaries.

Orange Kenya CEO Mickael Ghossein said in a statement yesterday, that the total amount of shareholder loans being requested “was still under discussion”.

Joseph Mayton