WirelessG has entered a strategic agreement with a black economic empowerment (BEE) consortium, amid a legal battle with Vodacom, which currently has a 26% stake in the wireless access provider.
WirelessG CEO Carel van der Merwe says Mightycare Mosegedi, a BEE consortium of telecommunications companies, has made an offer to acquire a 26% share in WirelessG's holding company G-Mobile Holdings - at a discounted rate - amounting to R48.5 million.
The consortium, says Van der Merwe, consists of "well-known corporate profiles", including former head of radio policy for the Independent Broadcasting Authority, Gladwin Marumo.
Marumo was also previously special advisor to the minister of communications and chief operating officer of state-owned broadcasting entity Sentech.
Other representatives will be revealed at a later stage, due to the sensitivity of the agreement at the moment, says Van der Merwe.
Legal bid
The latest acquisition offer comes about two months after WirelessG filed a legal case against Vodacom, claiming the operator went back on a shareholders' agreement signed between the companies five years ago.
Van der Merwe says WirelessG sold Vodacom its 26% stake at a 49% discount - a R30 million deal in the end - in exchange for certain exclusive commercial rights, including WiFi provision and infrastructure.
Vodacom yesterday filed its response to WirelessG's claims that the company reneged on their agreement. The operator has been advised not to comment on the legal issue ahead of the companies' day in court, lest it prejudice the case.
WirelessG now has 10 days to counter-respond and then a court case - set for 8 April in the North Gauteng High Court - will proceed, barring an out-of-court settlement.
No bad blood
Van der Merwe maintains WirelessG wishes to hang on to its relationship with Vodacom, despite the current circumstances. He says WirelessG just needs relief urgently, after what he says amounts to five years of missing out on potential revenue from the Vodacom agreement.
The latest strategic option of the BEE consortium buy-in, he says, is in no way indicative that WirelessG intends to end its relationship with Vodacom. On the contrary, says Van der Merwe, Mightycare Mosegedi sees significant potential in the Vodacom/WirelessG partnership - the reason for its interest in the company.
"The consortium sees huge opportunities with Vodacom and WirelessG, and they want the court case to be resolved." Vodacom's shares in WirelessG will, however, be "slightly diluted" should the consortium finalise its 26% acquisition in the company.
He says the latest agreement is a case of a new shareholder and a vital cash injection for WirelessG.
"Resolving the dispute between WirelessG and Vodacom is a condition precedent to the transaction [with Mightycare Mosegedi]," concludes Van der Merwe.
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