Telkom may not sell the wireless arm of its troubled Nigerian subsidiary Multi-Links to rival operator Visafone, private equity group Helios reiterated at the weekend. But Telkom has come out firing, saying Helios has misinterpreted a Nigerian high court ruling.
Telkom said in early April that it had reached an agreement to sell Multi-Links’s wireless assets to Visafone for an “enterprise value” of US$52m. Both companies operate code division multiple access (CDMA) wireless networks in a market dominated by GSM providers.
On Friday, Helios said it was “surprised” by “misleading statements” from Telkom denying the existence of a court order, saying an order served on Multi-Links on 6 January prevents Telkom from “disposing of or dissipating any of Multi-Links’s assets”.
Telkom reportedly cancelled a long-term lease agreement with Helios Towers, a base station operator, prompting Helios to file suit for damages of US$251m, plus interest. It asked the Nigerian courts to block the sale of Multi-Links to Visafone until the dispute was resolved.
However, Multi-Links and Telkom say the contract between Helios and Multi-Links is still in operation. “None of the parties is in breach of the contract,” says Ijeoma Abazie, chief corporate affairs officer at Multi-Links.
Helios says the “true position is that Helios Towers on 24 December 2010 filed an application for a ‘mareva’ injunction at the Lagos state high court and, upon hearing that application, the court ordered parties to maintain the status quo pending a final determination of the substantive suit relating to the breach of contract by Multi-Links and Telkom”.
However, Multi-Links disputes Helios’s interpretation, saying there is no order or injunction restraining Multi-Links from selling its assets or shares. “Telkom remains committed to exiting its investment in Multi-Links’s CDMA business,” Abazie says.
In what could be seen as a provocative move, Helios says in a statement that it “can only assume” that the Nigerian high court order is “well known to the director of Telkom and Multi-Links. No doubt the … JSE will be investigating whether Telkom has in any way misled its shareholders by the initial nondisclosure of a material fact and its subsequent denials.” — Staff reporter, TechCentral