Telkom's disposal of the bulk of its Multi-Links business could have hit a snag, because of an ongoing legal dispute that must be wrapped up before the sale can go through.
Telkom said in April it had sold the CDMA operation of its embattled Nigerian unit Multi-Links for $52 million, or about R350 million, to Nigerian CDMA operator Visafone Communications.
However, before the sale can go through, Multi-Links must resolve a dispute between it and a Nigerian firm, backed by private equity group Helios Investment Partners and SA's Shanduka Group.
Multi-Links had a master lease agreement with Helios, but last December took Helios to court arguing that the deal wasn't valid. Helios counterclaimed, asking the court for an order to have the contract upheld for an interim period, which since expired.
Yesterday, the Lagos High Court ruled in favour of Helios Towers Nigeria around the validity of the contract. Helios claims the telco cancelled a 10-year rental agreement after only three years. Helios was also claiming around $251 million, according to Reuters.
Telkom says the damages claim of $251 million has not been set down for hearing, but - despite this - the parties continue to operate in terms of the agreement.
The dispute must be sorted out before Telkom can wrap up the sale. The telco, which is in a closed period, said: “Multi- Links is reviewing the implications of the judgment and all options will be considered.”
Multi-Links has been a thorn in Telkom's side since the company initially invested in Nigeria about four years ago and Telkom has had to write the company down by more than R5.6 billion since investing in Nigeria.
Telkom has also been threatened with legal action from SA-based Blue Label for early termination of a contract. Telkom argues Blue Label breached its contract.
The telco's shares closed 1.38%, or 50c, higher yesterday at R36.70. Its year-end results will be released on Monday.
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