The sale by Telkom of part of its troubled Nigerian unit Multi-Links to Visafone has hit a hurdle following the news that independent tower operator Helios Towers and SA’s Shanduka Group are suing for more than US$250m after Multi-Links allegedly walked away from a 10-year lease agreement.
The Sunday Telegraph, a UK newspaper, first reported the dispute at the weekend. Now, according to wire service Reuters, Helios Towers Nigeria has filed papers seeking $251m plus interest and asking the Nigerian courts to block the sale of Multi-Links to Visafone until the dispute is resolved.
Telkom announced in early April that it had reached an agreement with Visafone to sell a large part of loss-making Multi-Links.
The Nigerian company has long been a noose around Telkom’s neck. Multi-Links lost R262m in the six months to 30 September 2010. It’s been unable to compete effectively in the consumer wireless communications market in the populous West African nation. Like Visafone, Multi-Links operates a network using code division multiple access technology in a market dominated by GSM providers.
In early April, former Telkom acting group CEO Jeffrey Hedberg announced the company had reached an agreement to sell Multi-Links to Visafone for an enterprise value of $52m.
According to The Sunday Telegraph, Multi-Links told Helios Towers that it was “under no obligation to pay rent” and other fees to the company. According to the paper, Multi-Links has argued that the contracts were not enforceable “because they were not signed off by a state official”. It says Helios argued a signature was not necessary.
Asked for comment, Telkom has referred TechCentral to a statement by Multi-Links’s chief corporate affairs officer, Ijeoma Abazie, who says the company initiated a civil action against Helios at the Lagos high court “seeking the court’s interpretation” over its concerns that Helios was not complying with the “applicable laws of the Federal Republic of Nigeria”.
“Helios brought a reactionary action (now argued to be an abuse of court processes),” Abazie says in the statement. “Both actions are still pending before the court, with costs having been awarded against Helios. Final judgment has been reserved in one of the suits.
“There is no restriction or injunction on any of the parties,” she says. — Staff reporter, TechCentral