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Wednesday, June 08, 2011

Multi-Links: Lagos court says deal is valid … It’ll not affect sale to Visafone - Telkom

A Lagos High Court yesterday, Tuesday in Lagos, ruled that the disputed lease agreement between Multi-Links Nigeria Limited and Helios Towers before the telecom operator ceded its Code Division Multiple Access (CDMA) arm to Visafone Communications remain valid.

This is coming as Telkom South Africa and owners of Multi-Links Nigeria said that the court case would not jeopadise the sale of the CDMA arm to Visafone.

Although experts have opined that Telkom South Africa goofed by not embarking on full-disclosure to Visafore prior to the purchase of its CDMA, some other interest experts have blamed Telkom South Africa for mismanaging Multi-Links Nigeria investment.

Reuters reported that the decision by the Lagos High Court could delay the effort by Telkom, South Africa's largest fixed-line operator, to sell its struggling Nigerian business, Multi-Links to Visafone,

But Telkom South in anticipated response to the outcome of the court case, said recently that the deal with Helios Investment Partners, would not affect the sale of Multi Links, which includes its CDMA subsidiary.

According to Reuters, Telkom was quoted as saying in a statement that the court had ruled the lease agreements between Multi-Links and local firm Helios Towers Nigeria were valid.

Helios, which is backed by private equity group Helios Investment Partners and South Africa's Shanduka Group, has sued Telkom for estimated sum of $252 million, about N390.06m, claiming the South African firm walked out on a 10-year lease agreement barely three years into the deal.

The report stated that Telkom had argued that the contracts were not valid, but court documents showed otherwise.

"The Lagos High Court in Nigeria found in favour of Helios Towers Nigeria in the matter regarding the validity of ... site lease agreements between Multi-Links and Helios," Telkom said.

It also said that Helios' damages claim for more than $250 million had not yet been set down for a hearing.

Telkom plans to sell Multi-Links for $52 million to Visafone Communications, to focus on improving its business in South Africa, where it has been hurt by fierce competition.

Equally, Telkom officials were reported as saying it would need to resolve the dispute before it could complete the transaction with Visafone.

Reassuring that the court case would not put at risk the sale of Multi Links to Visafone, Telkom official said that it was going ahead with the sale despite the $252 million law suit brought against the firm by Helios in Lagos.

Before its acquisition by Visafone, Multi-links Telkom had exited its CDMA operations due to failure to make profit despite reported turnaround programmes embarked upon by Telkom, which some stakeholders are now claiming was a conduit for siphoning fund hinged on mismanagement.

According to Telkom SA, Multi-Links had continued to operate at a loss motivating Telkom Group to declare its intension as at March 2010 to write down $1.2 billion in losses for Multi-links Nigeria.

Remmy Nweke with agency reports:
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