MERGERS, ACQUISITIONS AND FINANCIAL RESULTS
Helios Towers Suing Nigerian CDMA Network Over Contract Breaches
The sale earlier this year by South Africa's dominant landline operator, Telkom of its Nigerian subsidiary, the CDMA network, Multi-Links to another Nigerian network, Visafone may have been illegal, local media is reporting.
It is now emerging that the local tower network operator, Helios Towers was suing the CDMA network operator for US$250 million following an alleged breach of contract. As part of the legal action, it secured a court order that blocked the sale of the company by its parent owner.
According to ThisDay, the court order was not disclosed by Telkom to either Visafone or the Johannesburg Stock Exchange. The sale, announced in April was for US$52 million and did not include Multi-Links' fibre network or fixed line operations in Nigeria. The proceeds for Telkom were reported to be "net of the existing liabilities of Multi-links CDMA business", which it now emerges could include the Helios Towers legal action.
Telkom SA brought a 75% stake in the Nigerian mobile network operator in 2007 for US$280 million, and took full ownership in 2008 for US$130 million.
A Visafone official told the newspaper that the company was surprised at the new development, but is meeting currently with officials of Multi Links Telkom to thrash out the problem.