Telkom will not sell the CDMA part of its Nigerian Multi-Links business to Visafone for $52 million (about R350 million), because all the conditions have not been met.
In April, Telkom said it had sold the CDMA operation of its embattled Nigerian unit Multi-Links to Nigerian CDMA operator Visafone Communications. The CDMA part of Multi-Links accounted for about 90% of the Nigerian company's revenue.
However, Multi-Links had been involved in a dispute with a Nigerian firm, backed by private equity group Helios Investment Partners and SA's Shanduka Group.
Telkom CEO Nombulela “Pinky” Moholi says the transaction will not proceed, because Multi-Links was not able to wrap up the agreement with Helios.
However, Moholi was not able to say whether the unit would be liquidated as Telkom decided on 10 June to stop funding Multi-Links. She says the Multi-Links board will meet today to decide on a way forward and Telkom cannot speculate around its decision.
Acting CFO Dean Fredericks says getting out of the CDMA business is a key priority for Telkom. Multi-Links is not included in Telkom's results as a continuing business because it is classified as “held for sale”.
Multi-Links had a master lease agreement with Helios, but last December took Helios to court, arguing that the deal was not valid. Helios counterclaimed, asking the court for an order to have the contract upheld for an interim period, which has since expired.
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.
Multi-Links is also embroiled in a legal dispute with Blue Label, after its 10-year deal was cancelled early. Blue Label has threatened to sue the unit and is quantifying its damages before proceeding with arbitration.
Moholi says the agreements were between Multi-Links and the companies, and do not affect Telkom. She says Telkom is looking to Africa for growth opportunities, but will not repeat the mistakes it has made in the past.
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